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: email@example.com.
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: firstname.lastname@example.org
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: email@example.com.
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 – firstname.lastname@example.org
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 – email@example.com.
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