3/23/17-Healthcare, Budgets, Pensions & Much More
It’s not an exaggeration to say that there is a whirlwind of activity right now in both Harrisburg and D.C., with votes pending on matters of major import to our members and the broader economy. As I write, the Repeal-and-Replace for the ACA (aka “Obamacare”) is pending on the floor of the U.S. House, and whip counts show razor thin margins that could go either way. Our Governor’s Budget has been examined in weeks of Appropriations Hearings in the State House and Senate, and our President just released his inaugural Budget signaling his priorities for Our Nation. And there are less flashy – but still significant – issues moving forward in obscurity like Postal Reform and the elimination of the FCC’s safeguards for Digital Privacy. Each of these pieces of public policy have a ways yet to go, but it’s a perfect time to look at the components shaping the debate – seek feedback, with the potential that we might share our members’ aspects of support or reasons for concern.
After years of campaigning against “Obamacare,” the party seeking Repeal and/or Repeal-and-Replace now has control of the Capitol and the White House. And it turns out that a matter as personal, economically significant and complex is not so simple a matter to “just make better” with a few strokes – if the solutions were as easy as the slogans and talking points, our healthcare system would have been fixed long ago. The political calculus this go-around has been to seek party-line consensus, with a focus on speed over deliberation – which led to multiple party-line committee votes to move forward, before the full independent fiscal analysis was shared with legislators and the general public. When the Congressional Budget Office (CBO) scoring was unveiled – showing the projected winners and losers by way of tax breaks, more or less premium support, impact (or lack of) on cost-drivers, widening disparities in age-based premiums, and the projected ranks of the uninsured (a must-read here: https://www.cbo.gov/publication/52486) – the word that comes to mind is an intra-party freakout. When the plan all along is to use only your side’s votes, cat herding takes on monumental proportion – and so, I’ll keep to objections being raised only on the “R” team as the first major vote is set for today. On the fiscally conservative side, there are concerns that the greatly reduced premium supports – which are funded by taxes – are still too generous, i.e. expensive. On the moderate side of the party – including our freshman Congressman Fitzpatrick and neighboring Congressman Dent – there are concerns that cuts would worsen the Opioid Epidemic, that the Medicaid rollback and project loss of 14 million insured in year-one and 24 million in the next decade would be too disruptive to constituents, that not enough would be done to drive down costs, and that older Americans would face disproportionate burdens. In making these arguments, they note that older folks premiums would be priced 5 times higher than the young, corresponding support would shrink conversely, and that just removing the 60% actuarial value of a bottom-tier insurance offering (now the minimum, Bronze Level Plan) is not such a big deal cost container – especially if it is matched with higher out-of-pockets. It’s unclear what will happen if the House’s AHCA fails today, as there’s not been much talk of a plan-B – even as many in the Senate say this version is DOA there, and the original thinking was two versions reflecting each legislative body, fine-tuned in a Conference Committee. Please share your thoughts, and feel free to ask us any questions – we have been hearing strong concerns from the good folks on the front lines of healthcare delivery that they fear a return of the “good old days” of widespread uncompensated care, as uninsured flood back to the emergency rooms, with no significant monetary restitution provided to hospitals for indigent care they are obliged to provide by law.
And then we have the Budgets and other bonus items. The President’s proposal is more of a theme-setter than an actual Budget, as most of the Pay-fors are not included. It seems clear that the intent of POTUS and Congress is to move back into regular order and an actual budget process after years of appropriating with one-off Continuing Resolutions. As offered, several Agencies would have their budgets cut significantly, and some high-profile targets – we’ve heard from our member PBS station, WLVT – 39 – would lose funding altogether. We’ve also heard from some in the Educational Community about funding for supplemental nutrition and learning programs – again, it’s early and we want to hear your thoughts. At this stage, the clear winner would be the Pentagon’s finances. At the state level, INKY columnist had a good piece the other day calling it a “Magical Mystery Budget” since there’s promising bi-partisan talk at this stage of tackling the tough issues put off for years – like $62 Billion Pension Debt and rising, and a $3 Billion operating structural deficit – along with some down-sizing and streamlining of State Government. As I wrote before, those “cost savings” from “efficiencies” is hoped to yield around $2 Billion – but after weeks of budget hearings, leaders are still using words like “mystery” to answer how that will really work. So, too, how to get to numbers needed with the mix of tax hikes so far on the table – which is why more and more legislators from both sides are mumbling about keeping an open mind to revenue options. What follows from there could be another examination of all the so-called “loopholes” – or fresh new Sales and Use Taxes for those that pay or collect – like the laundry list already contemplated in the Great Property Tax Swap scheme. Also of interest to many members, especially those who do significant volumes of mailing like our marketers, publishers, banks and utilities – Postal Reform is on the move, following a decade of inaction. It would address many of the unfunded mandates and liabilities placed on the Postal service – and it would keep rates tethered to the CPI. That rate-setting lock expired end of last year, and many mailers worry about unpredictable rate spikes year over year. And lastly, the modest Digital Privacy safeguards that the Federal Communications Commission (FCC) put in place following the Rulemaking preserving an Open Internet are in imminent jeopardy of “Congressional Veto” by way of House and Senate Joint Resolutions of Disapproval. The rules require that broadband providers take reasonable measures to protect consumer and small business data – and that for some of the more sensitive data they collect, the ISPs be more transparent about collection and who they sell it to. The idea was that in an era of big data, massive hacks, and invisible markets of data bundlers, the companies that charge a small fortune for high-speed connectivity – should inform their customers and give modest opt-out options for the separate enterprise of reselling their browsing, viewing, listening and interconnected gadgetry’s communications habits. Apparently this small measure of safety and security has been placed in the “all regulations are bad regulations” bucket, we’ll keep you posted. Our next Legislative Committee Meeting is this Friday – as always, all are welcome as is your feedback. Jim Haigh, Membership Development & Public Policy: firstname.lastname@example.org
3/2/17-UBCC Will Enter the Debate on SB 76
After a thorough vetting by our Public Policy Committee -- and subsequent robust deliberations by our Board of Directors -- our Chamber has decided to constructively engage in the Great School District Property Tax Swap Debate (see Advocacy post 12/15/16 for details). We believe that no senior citizens on fixed incomes should ever lose their homes due to inability to pay Property Tax – and we will support targeted measures on the table that achieve that goal without crushing our Commonwealth’s fragile economy. We will also weigh in on solutions that get to the heart of the matter of rising Property Taxes – Unfunded Mandates. Most significant among them, Pensions, need structural reforms to address spiraling costs. Without a fix there, any new tax scheme will need around a half-a-billion in new revenues – year over year – to fund the collective obligations of our 500 School Districts statewide. We have listened to our Member School Districts who oppose the drastic loss of Local Control – and wonder with them how putting Harrisburg fully in charge of tax collection and redistribution, without even tackling the unfunded mandates they created, is a step in the right direction. Remember, this was going to be fixed with new Casinos, right? We also scrutinized the pros and cons for our small business community – and took a hard look at the demographic trends. It is inconceivable that this massive tax swapping scheme would not drive away the next generation to more welcoming states – while the drastic hikes and all the new taxes force most businesses to take steps that undermine collective prosperity.
Nearly identical versions of this Legislation have been introduced and debated over the last decade. The stated objectives of this legislation are the total elimination of Local School District Property Tax – and keeping seniors from losing their homes due to their inability to pay. SB 76 would fill the $14 to $15 Billion revenue hole with dramatic spikes in Personal Income Tax (PIT) and an increase – and massive expansion of – the Sales and Use Tax (SUT). A significant portion of our members are pass-thru entities, and would have at least a 60% spike in income tax. The many who rent would have no corresponding relief in property tax. And the majority of members – retail, hospitality and professional services – would be forced to collect or absorb 7% sales tax on previously exempt goods and services. Because this Tax Swap would not address major costs drivers – Pensions are estimated to add $500 Million in new burdens annually – the proposed increases and expansions of PIT and SUT would only go upward in the future. Compounding that trajectory are demographic trends – the Independent Fiscal Office (IFO) projects that due to shrinking population, loss of recent graduates to other states, and flood from workforce to retirement – we can expect a net loss of nearly a million citizens paying PIT in the next decade, while increasing demand on social services. Retirement income would become a target for taxation -- there is talk of that now. Our Commonwealth would likely see young professionals, seniors with means, along with countless small businesses fail or flee – further eroding the tax-paying population. There are more targeted proposals to keep seniors from losing their homes by strengthening existing programs. Moreover, it would be most prudent to first address the cost-drivers behind increasing school property tax – starting with Pension Reform. Otherwise, we’ll just be rearranging deck chairs on a sinking ship. In diligent consideration of all the above, the Upper Bucks Chamber of Commerce will publicly OPPOSE the School District Property Tax Swap Provisions as previously proposed in the Property Tax Independence Act – SB 76 – while constructively engaging in the process to craft consensus solutions that protect homeowners, better our schools, embrace the next generation – and promote growth and prosperity. Please share your feedback with Jim – email@example.com.
2/9/17-Let the Budget Season Begin!
Governor Tom Wolf delivered his third budget address on Tuesday, kicking off the sausage grinding of funding our Commonwealth for another year. The final product is due June 30th, and we begin with a multi-billion-dollar structural deficit. Many interested observers speculated that the bucket of one-time cash props had run dry, but it seems there's still coin under the couch cushions if you bring a microscope. The Governor's $32.3 billion budget balances in bulk on amazing "efficiencies" -- hunting the dragons often referred to as "waste, fraud and abuse" to achieve over $2 billion on paper. One high-profile example is the pending closure of the Hamburg State Center, where 80 intellectually disabled citizens are cared for by a professional staff of about 350 -- the costs come out to roughly $400,000 per resident per year. Similar facilities across the state are targets, along with prisons -- and the consolidation of state agencies into larger departments is part of the plan. Ten percent of the "efficiencies" come from the one-time windfall of a lease-leaseback of the Farm Show Complex, and there's the proposed sale of myriad state-owned assets. The budget purports to avoid broad-based tax hikes, but some would argue that a $300 million severance tax on natural gas drilling would hit energy consumers broadly. And if you happen to be targeted as a so-called "loophole" beneficiary, a half-a-billion bull's-eye is on your back. The budget also anticipates higher tax returns resulting from a boost in the minimum wage -- up to $12 an hour. This proposal, along with the severance tax, will likely need other revenues to backfill given the composition of the legislature -- and the efficiencies may not hold up to scrutiny. Perhaps the most curios proposal in this budget is the attempt to level out the fiscal disparities in local policing -- currently, over half of all municipalities rely solely on State Police for their protection, and that trend is growing. Governor Wolf is proposing a $25 per capita tax on citizens whose boroughs and townships do not pony up for their own departments, or are not in a paid service arrangement with their neighbors. This is just opening day of the season, and we anticipate several related issues -- including pension reform and the contentious school district property tax swap -- to get thrown into the budget sausage. So stay tuned, things will get interesting very quickly. And as always, your feedback is always welcome! Jim Haigh, Membership Development & Public Policy: firstname.lastname@example.org -- 215.536.3211
1/19/17 - Interested in Public Policy? Come and Join Our Committee!
We all know that government impacts business. Decisions from local, county, state and federal levels can create opportunity – or stifle commerce. And the carrots and sticks can vary widely by industry. What issues concerns you most? What changes would you like to see for your business, industry or place we love, Upper Bucks? Is Fairness in Sales Tax Treatment, Brick-and-Mortar vs. Online Goods and Services an issue that impacts your bottom line? Do you feel Reforming PA’s Budget Process or the Commonwealth’s Pension Systems would make for a better business climate? Do you have an interest in Workforce Development Curriculum and Partnerships? Have you lost out on RFPs or put off projects because of Prevailing Wage? Or are your goods and services on the long list of New Taxes proposed under Property Tax Swap legislation (SB 76 – see details in my last column on topic)? There’s no shortage of issues that have impact, and we obviously can’t tackle them all. That’s why it is critical we hear from you, our members, what matters most. Please share your thoughts – or better yet, get involved with our committee! We’re forging our priorities now. Together we can, and will, make a difference on issues that matter most to our membership. Our first meeting of the year is Friday, January 27th, 8-9am here in the UBCC conference room. You can reach me at the office or shoot me an email – Jim Haigh, Membership Development & Public Policy: email@example.com
1/5/17 - Happy New Year!
On my 15 mile back road commute here to UBCC this morn, there were still a half-dozen yard signs for both winning and losing candidates. Reality check: Our legislators have taken their oaths in Harrisburg and D.C., new sessions have begun, and the inauguration is only a couple weeks away. The trains have left their stations, and the legislative sausage-making is happening now. Here in Bucks County, County Commissioners just passed a bump in the hotel “bed tax” under new authority granted last year by the state legislature, with those increased funds statutorily dedicated to the promotion of tourism – the county-wide economic impact is pegged at $937.2 million, so tourism is a big deal here in Upper Bucks. As both your Chamber and the official gateway Visitor Center, we are hopeful that more resources will flow into our promotional and economic development efforts – the positive benefits extend far beyond our hospitality and retail members to boost our entire community. In Harrisburg, still a month out from the official start of budget season, a grim picture of widening deficits confronts our elected officials. Some estimates project a current year shortfall of $600 million on top of the consensus structural deficit figure of $1.7 billion and growing. But that's not the "hair on fire" part of the story -- our Commonwealth's shrinking tax-paying population is. And any measures coming down the pike to increase or swap or "reform" in any ways our taxing mechanisms need to factor demographic realities. The Independent Fiscal Office’s November report showed Pennsylvania is already losing a key demographic – people between 40 and 60. Any changes to our property taxes -- the subject of my last column, "How Would $14+ Billion Property Tax Swap Impact Your Business?" -- need to ensure that we don’t end up with a tax structure that further exacerbates that, since that constituency is a cornerstone of not just our tax base but our economic and employment well-being. We can achieve meaningful reforms -- including property tax reform-- without triggering those types of unintended but very real and damaging consequences. It's time to take down the yard signs and get to work. Your thoughts always welcome! firstname.lastname@example.org
12/15/16 - Tell Us: How Would $14+ Billion Property Tax Swap Impact Your Business?
Full disclosure first: I spent the last decade advocating against the expansion of sales and use tax to services like advertising, accounting, legal and a laundry list of small business services. This was a very big deal for the independent community paper industry I lobbied for – as it was for the coalition of trade groups representing nearly every industry and size of enterprise I worked with on this complicated and contentious issue. Early smoke signals indicate that measures to eliminate local school district property tax could see action soon into the new legislative session in Harrisburg. As your Chamber, we need to fully weigh the pros and cons for our members before taking any stand – the first step is sharing what’s being proposed and soliciting feedback. We will be sending surveys in the near future, and analyzing interrelated issues including cost-drivers like pensions, impacts on local rule, equitable funding across districts, demographic shifts and burdens, and other targeted options to keep seniors from losing their homes. But for this initial gut-check, we want to know how a $14.5 Billion tax swap will impact your bottom line – your net tradeoff for any commercial property tax, as replaced by increased PIT, and increased and significantly expanded SUT. Here are the details on how the tax swap would be paid for….
As our basis, we’re using committee staff summaries provided to state senators for the last version of the Property Tax Independence Act (SB 76), that deadlocked in a 24-24 vote last session. That legislation would have eliminated school district property taxes in the future -- in the interim, school districts carrying debt service would’ve been able to continue to collect property tax to pay off remaining debt service.
School property tax revenue – at time of last vote, the estimate was $14 Billion – would have been made up by the following sources:
Revenue raised under the increased PIT and increased and expanded SUT would be deposited into the Education Stabilization Fund (ESF). The ESF would provide districts with a dollar-for-dollar match for school property tax revenue that is eliminated under this amendment – i.e., if your district currently pays $8K or 25K per pupil now, it would receive the same after the swap. Each year, districts would receive a cost of living adjustment based on the Statewide Average Weekly Wage.
School districts may levy an additional Personal Income Tax and/or Earned Income Tax to raise additional revenue through voter referendum.
In addition to items currently subject to the state’s Sales and Use Tax, the last version of SB 76 voted on expanded the Sales and Use Tax to include the following goods – and services:
12/1/16-Overtime Rules and the Federal Regulatory Landscape
As you already know, the Federal Overtime Rules - which were set to go into effect today, December 01, 2016 -- were put on hold pending further review. So what is the status, and what should a business do now? For the latter, the Society for Human Resource Management (SHRM) is a tremendous resource (see: www.shrm.org/ResourcesAndTools/legal-and-compliance/employment-law/Pages/What-to-Do-Now-that-Federal-Overtime-Rule-Is-Blocked.aspx) As are, of course, local attorneys who specialize in labor law - Kathy Mills with Fitzpatrick Lentz & Bubba P.C., who presented our Lunch & Learn on precisely this topic, comes first to mind. As for the status of this particular regulation - and similarly scores of federal regulations - uncertainty is the new normal pending historic transition in the White House, coupled with a new majority Congress. IMHO, caution and guarded optimism are in order - along with a healthy dose of scrutiny as things actually unfold in real-time. Anticipate more misinformation than ever, between messaging wars -- and those that cover such matters for a living getting ahead of the realities. The Federal Judge's Thanksgiving Eve actions serve as a case study: Lots of reporting, and even more second-hand posting, called this regulation "Overruled" -- even dead. However: It was not, in fact, smacked down at this time by the Courts. Instead, it was put on hold pending Further Judicial Review - an important distinction that actually matters. Because this is the moment where many regulations go on their journey away from the legislating body that made law of the framework, and the regulators who hash out the details of that framework -- and onto a place where judges will decide. Until or unless the governing body actually votes together for corrective measures more clearly constructed. The judicial "time out" on New Overtime Rules, combined with the fury of pronouncements and speculative reporting have brought even more confusion about the ACA, aka Obamacare, as deadlines approach for compliance. It is still law, for now anyway. Beware the info-torrents suggesting wrongly that changes to status quo are imminent -- when the pace assumed defies the Federal Sausage Factory, even in Colonial Times for goodness sake. Major changes across the regulatory landscape are coming for sure, and we will be weighing in throughout the process - but we must all keep in mind that even Mr. Trump can't trump process, and the federal machine has more gears than you can shake a pointed stick at.
11/10/16 - So, How Many Pollsters Give Refunds?
That was among the many crazy thoughts streaming through my tired, little brain around 3 am Wednesday morning. Still don’t have an answer for that, but my guess is that all the subsequent excuses come free. Beyond that, we have a lot more important answers, bringing with them more questions -- and opportunities for UBCC and our members. Here in Upper Bucks, we’ll have Rep. Staats and Sen. Mensch continuing to represent us in Harrisburg, both in the majority, which is now veto-proof in the state senate. And Senator Toomey will again represent our Commonwealth’s citizens in Washington, D.C., still in the majority. We also welcome fresh faces, familiar names, starting with the 8th Congressional District, with Congressman-elect Brian succeeding retiring brother Mike Fitzpatrick. Which brings us to the top off the ticket, where an electorate clamoring for change cast their votes for the most unconventional candidate and change-agent in modern history – President-elect Donald Trump will take the helm of a polarized nation, a majority on both sides of the Capitol, and no shortage of intractable issues in need of fixing. One question I received since the election is “so, do we still need to buy health insurance…” and the answer depends on your health, finances, tolerance for risk and penalty – because the Affordable Care Act is still law, and will be when the current Open Enrollment period ends. And it will be law, until by legislative process, a new law modifies, repeals and/or replaces – which will be one of many opportunities to weigh in as a group, and help build a better mousetrap. We’ll be doing this together with a new member of Congress who’s no stranger to D.C. or the culture, who has demonstrated a commitment to listen to small business here in our region. This is only one of many matters of public policy of interest to UBCC at the local, state and federal level, that will certainly get attention. With new sessions starting in January, opportunities abound to build new relationships, make our voices heard and play a constructive role in forging better policy at all levels. Here’s where we need you: Share what issues matter most as you look towards 2017 – we’ll be sending surveys based on the feedback received. And please consider joining the Public Policy & Legislative Affairs Committee – together we can make the most of the fresh start, now that the votes have been cast and counted. Jim Haigh – email@example.com
11/3/16 - As if anyone needs a reminder: Get out and Vote this Tuesday!
I was tempted to joke about voting early and often. But in this extraordinary Election Season, with even the credibility of the voting process called into question, this is no laughing matter. Whatever you feel about the Top of the Ticket, don’t let that be a distraction from the critical races down ballot. Your vote could decide who will represent PA in the US Senate, and Upper Bucks and the 8th District in Congress. We co-hosted that debate last Friday, and the civil and thoughtful discourse was a welcome contrast to the attack ads the candidates and outside groups are running – invaluable to hear them in their own words, and not in the shadows of Presidential mayhem. Your vote may matter more this year than in recent history – for starters, the Senate and 8th CD are within the margin of error in most polls. A handful of votes could make all the difference in either race – and with it, potentially the balance of power in the US Senate, and significantly play into margins in the House. And of course, we have the statewide races and local elections – along with ballot measures including referendums on Open Space. Here’s a link to the Bucks County Board of Elections, where you’ll find Sample Ballots, a Polling Places Locator and a trove of other interesting information including links to Campaign Finance, and items that should instill confidence in our election system: www.buckscounty.org/government/CommunityServices/BoardofElections
The earth should still be revolving on Wednesday, the 9th – beyond that is anyone’s guess. Make sure to make your voice heard – this year it could count more than ever!
10/27/16 - A Big Thank You!
To our UBCC members - and not necessarily to legislators in other parts of the Commonwealth. Thanks to those who responded to our Legislative Action Alert and reached out in support of Pension Reform. Our legislators need to hear from you, and they were onboard. Unfortunately, the current process in Harrisburg of waiting to the last minute - as in, literally the last gasps of a two-year legislative session - brings a collective "blame the clock" when time runs out. Which it did last night on some major issues we've been tracking and engaging. And so Pension Reform will have to wait till January to start climbing the mountain again towards passage, where it will likely get tangled into the messy Budget process. And on that topic, Performance-Based Budgeting will need a reboot in the new year. And all the counties and communities that had budgeted from millions in funds tied to casino impacts - including Bucks and our Lehigh Valley neighbors - well, your operations got exponentially more difficult when "time ran out" yesterday without the needed legislative fix. There's a very long list of pending legislation that died last night, which will need to start from the beginning in the new year - in the coming weeks, we'll share more about that, along with our emerging legislative agenda for 2017. On to elections: hope to see you tomorrow at Delaware Valley University, at 8am! The candidates for the 8th Congressional District -- Brian Fitzpatrick and Steven Santarsiero - will be explaining why they deserve your vote, as they answer questions submitted by Chambers and members, including a long list from UBCC. This important event is jointly sponsored by the League of Women Voters of Bucks County, in conjunction with Upper Bucks Chamber of Commerce, Central Bucks Chamber of Commerce and the Chambers of New Hope and Pennridge. You can also catch it live at www.PCNTV.com - and as always, any feedback is always appreciated -- Jim Haigh - firstname.lastname@example.org.
10/26/16 - Alert! Pension Reform Votes TODAY, Make Your Voice Heard!
A turbulent final day of session is set in Harrisburg, with House and Senate votes coming for Pension Reform among high priority issues. Late last night, a House-Senate Conference Committee voted on party lines to move a final compromise on Pension Reform to their respective floors - this process tees up straight "up or down" votes in the State House and State Senate, as no further amendments can be considered. Some are calling the proposed reforms "historic" because they would finally tackle the fiscal pain of paying down the unfunded liabilities, with most savings realized further down the road - unlike duck tape measures over the last decade plus that merely cut pension contributions to prop up the Commonwealth's budget. Because there's obviously no magic "Wayback Machine" - or political will for that matter - to actually undue the massive 2001 benefit expansion that fueled the time bomb, there's no perfect fix that will satisfy all stakeholders or otherwise make painful math just go away.
In a nutshell, this yes-or-no version Pension Reform - Senate Bill 1071 - would change the retirement benefits options for new school teachers and state employees (except for state police and corrections officers) hired in 2018 by creating three types of plans: The first two options offer a hybrid model with about half of retirement proceeds going into the guaranteed plan and the other half going into a private sector-like 401(k) defined contribution plan that rides the stock market. The third option is a standard defined contribution plan. For each, employees would pay 7.5 percent of salary and the state or school district share would drop below what they pay in the current guaranteed plan. The Independent Fiscal Office (IFO) issued analysis indicating that the reduced employer share will shrink retirement benefits for future hires compared to current employees in the two systems, and projects $4.3 billion in savings to taxpayers in the out years of the three-decade window. The existing debt load of the two main retirement systems, SERS and PSERS, is estimated between $55 and 60 billion -- this would not change with the reforms proposed in SB 1017, and would still need to be addressed with separate legislation in the next session. CLICK HERE for a link to the IFO's Actuarial Note.
The PA Chamber, along with many local and regional Chambers of Commerce, are urging their members to urge their State Representatives and State Senators to VOTE YES on this important piece of Pension Reform. Movement from defined benefit to defined contribution retirement plans is a critical component in shielding taxpayers from perpetual uncertainty and ballooning unfunded liabilities, and here's an opportunity where we can't let the perfect be the enemy of the good. Here's a link to urge your legislators to Vote Yes: http://voteyesonpensionreform.com/.
Today's Votes on SB 1071 are Yes or No -- no other fixes can be considered to add to the legislative sausage that ground out of the Conference Committee last night. If you have any questions, comments or concerns about this version of Pension Reform, please give call me or reply to this email.
10/20/16-This Week in Government Affairs
The Pennsylvania Insurance Department on Monday approved premium increases of up to 55 percent for health insurance plans sold on the Affordable Care Act's online marketplace in the state. Calling the increases “significantly higher than (she) would have liked,” Insurance Commissioner Teresa Miller explained that the rate hikes were needed to keep insurers from abandoning the market completely. “We were trying to make a one-time correction … we hopefully got these products to a place now where they are more accurately priced,” Miller said. Increases averaged 32.5 percent for individual plans and 7.1 percent for small group plans, according to the Department's news release. Reminder: the annual Open Enrollment period during which people can buy and switch plans on the marketplace runs from Nov. 1 through Jan. 31. Meanwhile, House and Senate lawmakers returned to Harrisburg Monday for the first week of a busy two-week session sprint in which it's likely they'll wrap up legislative action for the 2015-16 session. A diverse cross section of stakeholders, including the PA Chamber, continue to work with lawmakers toward getting a comprehensive public pension reform measure to the governor’s desk. Senate Bill 1071, previously sent to conference committee to iron out differences between the two chambers, would be the likely vehicle to deliver these needed reforms. Other business-related legislation with a shot for considertation over the next couple weeks include reforms to the state’s Unemployment Compensation system relating to seasonal workers, and a measure that would bring more transparency to the process by which state contracts are negotiated with private attorneys. Also on our radar is pending House consideration of Senator Bob Mensch's Performance Based Budgeting legislation, SB 1341, which would streamline state government spending by requiring departments and agencies to justify their budget requests for all existing, as well as proposed programs, for each fiscal year. And finally: plan to attend the UBCC and partnering Chambers sponsored Debate featuring the Candidates for the 8th Congressional District -- Steven Santarsiero and Brian Fitzpatrick -- Friday, October 28, 8 a.m. at Delaware Valley University. As always, your feedback on public policy and government affairs is most welcome -- Jim Haigh: email@example.com
Last week our Government Affairs Committee heard firsthand from Senator Bob Mensch about his Budget Reform Legislation, Senate Bill 1341. Sen. Mensch explained how his measures would help eliminate wasteful government spending in Pennsylvania. SB 1341, also known as Performance Based Budgeting, seeks to streamline and justify discretionary and state government spending by requiring departments and agencies to justify their budget requests for all existing, as well as proposed programs, for each fiscal year. This would allow the legislature and the Governor to properly budget for Pennsylvania state agencies. Specifically, the bill would create a performance-based budget board to review the performance-based budget plans of Pennsylvania agencies and make recommendations on how each agency’s programs may be made more efficient. While it's crunch time in Harrisburg, with limited session days left leading into the general election, hope remains for this budgeting reform -- the Senate passed SB 1341 over to the House, where the bill maneuvered past Finance straight into the Appropriations Committee setting up quicker consideration. On the Federal Front, some cautionary hope on the New Overtime Rules -- the US House voted to delay the implementation and enforcement slated to commence on December 1st. However: the 6-month delay would still need to pass the Senate in the post-election Lame Duck Session -- and then Both Chambers would likely need to override an almost certain Veto from the Executive Branch. So, as a practical matter, you may want to abide the professional advice given at our recent Lunch & Learn on Topic: Plan for the worst and hope for the best. And on a final, election-related note: if you haven't yet, mark your calendars and plan to attend the UBCC and partnering Chambers sponsored Debate featuring the Candidates for the 8th Congressional District -- Steven Santarsiero and Brian Fitzpatrick -- Friday, October 28, 8 a.m. at Delaware Valley University. We sent in a list of questions for the candidates, but if you have any you'd like to add, get them to me and I will share with the moderators. And as always, feedback is always welcome! Jim Haigh - firstname.lastname@example.org
9/29/16-Local municipalities, UBCC and QCSD form policy group to boost regional collaboration, enhance community
Keeping the best interests of taxpayers in mind, representatives from QCSD, four municipalities, and the Upper Bucks Chamber of Commerce recently met to exchange ideas. The goal of the newly formed coalition is to find ways to help each other communicate important issues to the public, share services and possibly purchase common goods. Meeting participants included Paul Stepanoff, who shared information on behalf of Richland Township, where he is the manager. He is also, of course, the QCSD School Board President. Others sharing ideas were Milford Township Manager Jeff Vey, Haycock Township Secretary/Treasurer Chris Bauer, Upper Bucks Chamber of Commerce Membership Development and Public Policy Director Jim Haigh, and QCSD Community Relations Coordinator Ricki Stein. Other board members in attendance were Chuck Shermer and Ron Jackson. Much talk centered on upcoming road work surrounding new and old developments that will affect traffic in the region. Some projects involve Lehigh Valley Health Network (LVHN), St. Luke’s Hospital and LifeQuest, which are driving much of the development, as well as several 55-and-over housing projects. Participants agreed to find ways to share communications about road and bridge closures to minimize inconvenience to commuters and school bus routes. Vey explained that road work plans rely heavily on input from PennDOT, the Department of Environment Protection (DEP) and the Army Corps of Engineers. Participants also discussed possibilities for purchasing goods and services to save money. The group plans to meet every two months. Discussion results will be conveyed to the public. QCSDTVNews teachers, along with Haigh and the UBCC, will collaborate to engage students in real world government and business experience, helping municipalities and local employers tell their stories on the local public access cable channels and also YouTube. We’re excited to be part of this important working group, this first meeting has already shown meaningful opportunities for collaboration. Have an idea for the group? Email Jim: email@example.com
9/22/16 - Performance Based Budgeting? Hear about it Here, Directly from Senator Mensch
Next Friday, the UBCC Government Affairs Committee will host State Senator Bob Mensch for a briefing on his state budget process reform legislation, Senate Bill 1341, which would bring Performance Based Budgeting to our Commonwealth. SB 1341 seeks to streamline and justify discretionary and state government spending by requiring departments and agencies to justify their budget requests beginning with dollar one, for all existing as well as proposed programs for each fiscal year, before they can receive consideration for budget funding. The bill would create a performance-based budget board to review the performance-based budget plans of Pennsylvania agencies and make recommendations on how each agency's programs may be made more transparent, effective, and efficient. The issue is most timely, and just this week a joint Senate Appropriations and Policy Committee Hearing was held, which included Dr. William E. Harner, Superintendent, Quakertown Community School District - sharing testimony on the successful performance-based budgeting experience at QCSD. Committee members have already received direct invitations for the 8 a.m. meeting next Friday, September 30th, here at the UBCC Board and Conference Room -- all UBCC Members are welcome, but space is limited -- so please RSVP to Jim Haigh, Membership Development & Public Policy: firstname.lastname@example.org or 215.536.3211.
9/15/16 - Mark Your Calendars & Get Us Your Questions!
Did someone say Election Season? As I write, I'll soon be heading out to a "get to know the candidates" event for the incumbent-less 8th Congressional District. This is one of what will likely be a multitude of political events here in Upper Bucks and around the County. One that all UBCC members should mark on their calendar is the Big Debate on Friday, October 28th at 8 a.m. - almost on the eve of what's shaping up to be an historic election. This event at Delaware Valley University, featuring candidates Brian Fitzpatrick and Steven Santarsiero, is jointly sponsored by the League of Women Voters of Bucks County, in conjunction with Upper Bucks Chamber of Commerce, Central Bucks Chamber of Commerce and the Chambers of New Hope and Pennridge. Now that you've marked your calendar...think of what questions you would like to ask of each candidate! We're working on a strong list now, and want to be as inclusive as possible - this District is rare in that we constituents still have a huge voice. By that I mean the borders reflect the contours of our County - one of the very few in the nation not gerrymandered to a degree where candidates essentially chose their voters. Here in the 8th, we still choose our candidates - get me your burning questions, and we'll do our best to get real answers on policy that matters to UBCC, our Members and the Community we call Upper Bucks. Email Jim Haigh at email@example.com.
9/8/16 - Government Affairs: Taking a Bold Stand
Our peers at the Greater Lehigh Valley Chamber of Commerce took a bold stand this week, testifying at a public hearing in support of increasing the minimum wage in Pennsylvania. Putting the actual public policy aside, it is a really big deal when a chamber - or trade association, union or other member based interest group - breaks from state and national namesakes' positions on a major issue. Especially when the issue is contentious, polarizing and any stance is bound to ruffle more than a few feathers. In this instance, they surveyed their diverse membership, crafted and debated and refined a nuanced policy position - and are publicly backing a position representative of their unique membership, and not the state and national chambers. Immediate feedback I've seen through public and private channels has not been overly charitable to what is objectively an act of independence - and reporting has not captured the nuance and flexibility actually proposed regarding wages. For the sake of the rigorous process our northern peers have in place for adopting meaningful public policy positions on matters of significance, we might hope that any backlash would be based on the substance of their stance - and not the mere fact of their "breaking ranks" as some are calling it. Chambers of all sizes have often been stereotyped as rubber stamps of public policy that flows from national, to state down to local - with little or no input from actual members. Deserved or not, that is a real and pervasive perception - acts of local independence, where members votes are counted, certainly challenge the stereotypes. The safest position is often taking no position, ruffling no feathers - but in reality, government happens to you, if you let it. And just a reminder: we want your feedback on this -- or any government affairs issues that matter to your business. Jim Haigh: firstname.lastname@example.org.
A hint of fall is in the air, and our State Representatives and Senators head back to Harrisburg for voting session at the end of the month. Several unfinished, budget-related items are still needing attention – these include proposals to expand gaming in the Commonwealth. The final 2016-17 budget was “balanced” using around $100 million in hoped for revenues from the yet-to-be enacted plan. Bills legalizing internet gaming, fantasy sports betting and slot machines at some off-track betting sites (and in certain airports) was approved by the House in June -- and is still awaiting action in the Senate. Movement on pension reform is also pending this fall. Before breaking for the summer recess, the House and Senate were debating two separate reform proposals -- both have a 401-K style component. One is a stacked-hybrid retirement plan – in it all new state and public school employees would keep the traditional defined benefit for the first $50,000 of their annual salary, then a defined contribution plan for any salaries above and beyond that figure. The other is a side-by-side hybrid retirement plan: benefits for future public employees would be split into two parts regardless of annual salary – with a portion going towards a defined benefit plan, and the other portion going towards a defined contribution, 401-K style plan. As it stands, a legislative pension reform vehicle is pending in a conference committee. Chambers and other allied stakeholders continue to urge legislators to come to an agreement on a substantive, comprehensive pension reform plan – one that addresses the growing unfunded liability and shift the risk away from the taxpayers. With the unfunded pension debt expected to jump again to about $60 billion, the pension crisis impacts every single Pennsylvania taxpayer – arguably the greatest threat to PA’s long-term fiscal stability. Today, more than 60 cents of every new dollar in revenue goes towards the state’s pension payments. The state will pay nearly $3 billion toward the pension systems this fiscal year – and that is expected to increase by nearly $1 billion by 2020. While there is growing bipartisan agreement that the pension systems as currently structured are unsustainable, arriving at consensus on actual, viable solutions in an election year could pose additional challenges. Then again, elections are about accountability, aren’t they? The UBCC Government Affairs Committee is always looking for new members, and is an open door for any policy interests or concerns: email@example.com
8/o4/16-Legislative Survey: How Would Postal Reform Impact Your Business?
Of all matters of public policy, laws and regulations governing the Postal Service are among the least sexy -- and not traditionally the domain of local, independent Chambers of Commerce. However, the legal mandate that caps rate hikes at the consumer price index is set to expire on December 20th of this year. Without going into the weeds, this means that -- absent new law renewing and updating Postal Reform last passed a decade ago -- annual rate increases could spike double digits, and current predictability would be out the window (note: this is distinct from the recent "Exigency" up-and-down rollercoaster). Legislation just moved out of Committee in the US House, and there's now talk of possible action in the Senate. As someone involved with this issue over the last many years, I can attest to how difficult consensus is to reach on the interrelated pieces of Postal Reform -- but the expiration of CPI Rate Caps makes action more critical for all stakeholders. Our voice, joined by sister chambers and other potential allies, could make a difference -- and there's a "tradition" of passing Postal Reform after decade-long intervals of inaction, invariably in Lame Duck Sessions. My informal polling of select UBCC Members so far indicates this is a big deal to them -- so I think this issue merits a formal poll of the entire UBCC Membership, as we consider if or how we might actively engage in shaping Postal Reform. Please take this short survey: http://survey.constantcontact.com/survey/a07ed1cw4teirgernl1/start
The more the funding package that passed in the middle of night to pay the Commonwealth’s bills this fiscal year gets analyzed by independent experts, the more big holes are starting to emerge. According to a report this week from S&P, the shortfall from gimmicks - like projections of $20 million from line item “Volkswagon Settlement” - could be a half-billion or more off base. There were millions budgeted from special liquor licenses for casinos - but nobody bothered to ask the industry if they wanted to pony up millions to serve patrons between 2 a.m. and 6 a.m. Turns out they don’t, with many stating they wouldn’t even if allowed for “free” under current licenses - bottom line, no takers, another hole in the budget. Sound public policy cannot happen in a vacuum, and that’s why it is critical our committee meets regularly with our elected officials. At our last meeting we learned that the legislature will attempt another push for pension reform this fall, and at our next meeting Sen. Mensch will give us a detailed briefing on his Performance Based Budgeting initiative. The UBCC Government Affairs Committee is always looking for new members, and is an open door for any policy interests or concerns: firstname.lastname@example.org.
7/21/16-Legislative Alert: All Quiet...Except for the National Convention Circus
With the PA Budget now history, our state representatives and senators are out of session until late September, back home working in district. Congress is also in recess, while both parties crown their presidential candidates -- so with all eyes on Cleveland and Philadelphia, at least no legislative damage will be done. This time last week, our legislature had just passed the budget in the middle of the night, and we among many interested parties are still unpacking hidden gems buried in the legalese. Our neighbors to the north had a rude awakening as they’d been kept in the dark about new provisions clawing more money back to NIZ developers - merits pro vs. con aside, the process was the antithesis of open, participatory government. So let’s end on a positive note: additional funding was included to combat the opioid epidemic, including expanding treatment options - 20 Centers of Excellence will soon open statewide. And we will have one of those COEs here in Upper Bucks, with the DHS selection of Penn Foundation.
7/14/16 - Legislative Alert: PA’s “Complete” Budget Now Law! The increased spending passed at deadline weeks ago -- is now matched by new taxes and one-off gimmicks that passed literally in the middle of last night. There were no broad-based increases to income or sales and use tax – nor expansion to include small business services – but several groups were singled out for taxing persecution. Smokers will start paying $1.00 more per pack on August 1st, while the growing “vaping” industry could be pushed to the brink with a 40% tax at wholesale overnight. Also impacted by the late night deals are: Digital downloads (which might also include streaming services like Netflix – unclear at this time), bank shares, casino revenues, cuts to certain economic development tax credits – in addition to the openly discussed liquor “reform,” gambling expansion and tax on fantasy sports betting. There’s a lot more to unpack, as the ink isn’t dry and details are still be tinkered with. Stay tuned, much more on the PA Budget and other matters of public policy to follow – in the meantime, and comments, questions or concerns, I’m here to help – email@example.com
7/7/16 - Legislative Alert: PA Budget -- $31.5 Billion spending package became law without the Governor’s signature. However: just how to pay for it all is still up in the air. With a 5 percent increase in spending, on top of a growing structural deficit, and with one-time gimmicks in short supply after years of, well…at this point it appears all but certain that some form of new tax increases will become law. For the moment, raising “sin taxes” like those on tobacco products have the most support under the dome, and discussions still swirl around natural gas – however, things can change in a heartbeat. We are watching developments closely, ready to mobilize in opposition against a perennial favorite only whispered so far this season: Expansion of Sales and Use Tax, to include a host of goods and professional services that would cripple small business. Anything but “closing loopholes,” taxing accounting, advertising and legal services – along with clothes, shoes and food – would be brand new taxes for those forced to collect and pony up fresh coin. I have personally fought, successfully, against Expanding SUT for more than a decade – we have strong allies in a coalition of state trade associations, all ready and able to fight. Stay tuned, more on this and other matters of public policy to follow – in the meantime, and comments, questions or concerns, I’m here to help – firstname.lastname@example.org.
|Upper Bucks Chamber of Commerce||