5/3/18 - Legislators Give Annual State Update At UBCC
From tax credits to performance based budgeting, state police services, education and transparency reporting, the annual legislative breakfast series kick off “State of the State,” featured Representative Craig Staats and Senator Bob Mensch at McCoole’s Arts & Events Place on Friday, April 27.
It was the first of the Chamber’s annual 3 part series aimed at bringing elected officials from all areas of public service to the Upper Bucks business community.
Partisan politics aside, both Staats and Mensch focused on issues concerning both sides of the aisle: from dealing with the opioid crisis and funding for state police covering local jurisdictions to education - especially vocational and trades career training for youngsters ahead of high school graduation, and mental health resources and counseling in our schools.
“We should be investing here in counselors for prevention, not in the aftermath,” Staats said, in response to school violence and fatalities in recent months.
Staats addressed higher education with a plan that would enhance college articulation agreements and provide a way for students to easily understand which community college courses would transfer to a four-year college or university. “This allows people to make time and money [choices] and savings” before enrolling in classes, Staats said.
Efforts to create more transparent state spending are moving ahead with the creation and ongoing implementation of 2017 Act 48 Performance –based Budgeting and Tax Credit Efficiency Act.
Mensch said Pennsylvania currently leads the nation in budgeting transparency efforts and legislation.
"We assume last year's budget and build next year's by adding to it...we agreed we would no longer assume that, " Mensch said.
John M. Olson, vice president of wealth management for Janney Montgomery Scott, LLC in Allentown, said his key take-away from the “State of the State” was the performance based budgeting plan.
For Olson, key questions remained. “Is the money spent by the various agencies getting the proper return on investment? If not we need to reevaluate how much each agency gets instead of continuing to dole out money and raise taxes to meet the various other state demands,” Olson said.
Ron Jackson, a District school board director at Quakertown Community School District, challenged the funding of public employees retirement pensions, known as the Pennsylvania Public School employees’ Retirement System or PSERS, calling it unsustainable.
“The public pension crisis is not getting any better and that needs to be resolved before we can stabilize the tax increases as we go forward,” Olson said.
The legislative series continues with “State of the County” on June 1, also at McCoole’s. To register, visit http://web.ubcc.org/events/Legislative-Series-State-of-the-County-June-1-2018-826/details.
11/2/17 - Spooktacular News: PA Has a Budget (Mostly), New Manufacturing Incentives, and…
In full disclosure, the following was not shared from a Russian Bot or Troll Farm. I can’t be the only one who is finding it increasingly difficult to read and watch the news these days – and only half in jest propose marketing our Public Policy member benefits as “we read the news so you don’t have to.” What follows will completely avoid the numerous high-profile national narratives, and focus on some pro-growth policy that landed in and around the mostly complete PA Budget.
With the Tax Code in place, our Commonwealth will again be borrowing heavily. There will be a multitude of new options for those fond of gambling – and they’ll be able to play with more fireworks, which will be amply taxed as well. So for those looking to help fill the PA Treasury, a solid option would be doing some online gambling in your backyard on a mobile device – as you safely fire off some bottle rockets and Roman candles. OK, snark aside, what follows next are two bits of positive Pro-Growth News – especially if you are in or serve the manufacturing sector. The first is a summary of some solid Economic Development Initiatives introduced and shepherded by our own State Senator, Bob Mensch. And the second is a brand new initiative, just launched by Governor Tom Wolf, to support manufacturing and link job training to career pathways to ensure that training leads not simply to any job, but to careers that provide higher pay and opportunities for advancement with Pennsylvania manufacturers in today’s global economy.
The following provisions are part of the Tax Code legislation approved by the Senate and House of Representatives, and signed by the Governor:
Qualified Manufacturing Innovation and Reinvestment Deduction
This initiative will provide an incentive to Pennsylvania manufacturers to make large-scale investments to increase or establish manufacturing capacity within the Commonwealth. It will permit manufacturers making capital investments in excess of $100 million to claim a deduction against their taxable income. “This deduction will encourage businesses to invest in Pennsylvania and pave the way for the economic growth and job creation throughout the state,” Mensch said. “It is imperative that the legislature start to shift its focus to how it can facilitate economic growth. The Qualified Manufacturing Innovation and Reinvestment Deduction is an important tool to use in this crucial effort.” This provision will have no adverse fiscal impact on 2017-18 or 2018-19 budgets as the recipient has three years to make the qualified capital investment and five years to attest to the state that the project is completed. Additionally, the deduction cannot reduce the manufacturer’s tax liability by more than 50 percent. “This new concept will permit Pennsylvania to provide an incentive to attract capital investment in our manufacturing facilities now without any negative impact on our budget process or revenue collections,” Mensch said.
Corporate Net Income
House Bill 542 also includes Senator Mensch’s legislation to remove the $5 million cap on Net Operating Losses deductions and increases the cap of 30 percent of taxable income as follows: 35 percent of taxable income for tax year 2018 and 40 percent of taxable income for tax year 2019 and thereafter. Additionally, the measure addresses a recent Supreme Court ruling that a flat deduction for net loss carryover is unconstitutional since it violates the Uniformity Clause of the Pennsylvania Constitution. This provision is estimated to generate additional revenues of $52.6 million in 2017-18 and $80.3 million in 2018-19 following the court ruling.
“Initiatives that help grow the economy are my top priority, and I am thrilled that these job-creating provisions have been amended into the Tax Code,” said Mensch. “An expanding economy means more jobs and new revenue derived from commercial activity, not the taxpayer’s wallet.”
Governor Wolf’s New Manufacturing PA Initiative:
Manufacturing PA partners the commonwealth’s research universities and Industrial Resource Centers to accelerate manufacturing technology advancement and adoption, foster manufacturing innovation and commercialization, and build a 21st century workforce. Manufacturing PA initiative is made up of three new programs, each of which will provide support for Pennsylvania’s manufacturing community in different ways:
• The Pennsylvania Manufacturing Training-to-Career Grant program will help companies identify and train a skilled workforce while creating a workplace culture that enables the workforce to advance and the company to grow. Grants will be provided to Pennsylvania manufacturers who partner with technical and trade schools, Pennsylvania’s community colleges, and those non-profit organizations that demonstrate both experience and expertise in the development and deployment of workforce development programs.
• The Pennsylvania Manufacturing Innovation Program will leverage the internationally acclaimed science and engineering talent and discovery capacity of Pennsylvania’s institutions of higher education to help ensure that the commonwealth remains an international leader in manufacturing. This will include a Manufacturing Fellows program, designed to support designated undergraduate and graduate student Fellows in both long- and short-term engagements with industry.
• Pennsylvania’s Industrial Resource Centers will expand their outreach to include small and medium-sized businesses, and will continue to provide technical, strategic, and market-based assistance to Pennsylvania’s manufacturing sector.
The programs will take advantage of the expertise of the Department of Community and Economic Development’s strategic partners, including the National Institutes of Standards and Technology Manufacturing Extension Partnership funded Industrial Resource Centers, Pennsylvania’s colleges, universities, technical schools, and non-profit organizations.
9/28/17 - Committee Rapid Roundup and…Tax Reform?!
Our first Public Policy and Legislative Affairs Committee meeting after UBCC’s annual State of the Union breakfast was as sobering as it was spirited. Our State Senator, Bob Mensch, gave a detailed update to our group about the state of budgetary affairs in Harrisburg. If you guessed that was the sobering portion of the meeting, a gold star for you. The plan for overcoming stalemate in the months-long overdue revenue component of the already-passed spending package – aka a complete Budget – is to have a special conference committee grind out the toxic sausage. With eye-popping charts, Senator Mensch explained where the money goes, what has been cut, and the structural imbalance matched with shrinking receipts. He noted that our current state of affairs is entirely predictable, and what is needed perhaps most is economic growth: We agree, and pledge to support public policies to advance that goal. We also had a thought provoking presentation on gerrymandering and possible solutions from Fair Districts PA, who had asked to speak to our group. Among issues agreed upon were the facts that our Commonwealth has some of the most tortured legislative district boundaries in the Nation, that Bucks County is blessed with one of the “purest” borders in both the state and the country – and that following the next Census in 2020, it is more than probable that Pennsylvania will lose at least one Congressional District, and possible more. We’ve lost one District in each of the last two Censuses, and a decline from 18 to 17 or 16 would put the contours of Bucks’ own humble 8th CD at risk or worse. The proposal that was advocated by our presenters was a shift from current party leadership drawing the lines, without much in the way of transparency and oversight, to a new Commission structured to be independent and transparent, and with a prescribed process. Among concerns raised in spirited Q & A were: whether a solution that would need a Constitutional Amendment would further enshrine a two-party political duopoly, or if the cure was worse than the ailment, whether targeted measures to better define and prohibit “gerrymandering” under current law, and whether there are other options for neutral map-making based on the latest technology, blind to voting records and party affiliation. More broadly, many noted that gerrymandering is one large head on a three headed monster that breathes fire on democracy – closed primaries and oodles of outside money would still need attention. The clock is ticking on Census 2020, and the interrelated issues will continue to draw our attention in form of priorities, consensus solutions – and more lively discussion: welcome to the dialogue.
And in other news, and at long last, Federal Tax Reform was finally introduced yesterday. Here is a first-draft summary: On Sept. 27, leaders in both chambers of Congress and the administration released the https://www.finance.senate.gov/imo/media/doc/9.27.17%20Unified%20Tax%20Framework.pdf. The framework created by the so-called Big Six provides guidelines for the congressional tax-writing committees as they craft legislation. The group is composed of Speaker Paul Ryan (R-Wis.), Senate Majority Leader Mitch McConnell (R-Ky.), House Ways and Means Committee Chairman Kevin Brady (R-Texas), Senate Finance Committee Chairman Orrin Hatch (R-Utah), Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn.
The centerpiece of the plan calls for lowering the corporate tax rate from 35 percent to 20 percent. That target is above President Trump’s long-stated goal of 15 percent but below the average for developed nations, and near the limit of what experts think is possible as part of a package that doesn’t cut overall tax revenues. For businesses that file through the individual side of the code, such as S-Corporations and partnerships, Republicans aim to create a special new top rate of 25 percent, as opposed to today’s top rate of 39.6 percent.
The framework will call for allowing businesses to immediately deduct the cost of new investments in equipment and machinery for at least five years, a major part of a policy long sought by House Speaker Paul Ryan.
Specifically, the framework:
Tax brackets -- Consolidates the current seven tax brackets into three brackets, with rates of 12 percent, 25 percent, and 35 percent. It leaves room for lawmakers to add a higher fourth bracket rate, to apply to high-income taxpayers. It also suggests that brackets should be indexed to “a more accurate measure of inflation,” which may refer to chained CPI.
Standard deduction -- Increases the standard deduction to $12,000 for single filers and $24,000 for married filers (currently: $6,350 for single filers and $12,700 for married filers). It eliminates the additional standard deduction and the personal exemption for filers.
Itemized deductions -- Calls for the elimination of several itemized deductions, without identifying specific provisions and calls for preserving the mortgage interest deduction and charitable deduction.
Family tax credits -- Replaces the personal exemption for dependents with an expanded nonrefundable portion of the child tax credit (amount not specified) and a new $500 nonrefundable credit for non-child dependents, while it increases the phaseout thresholds for the child tax credit.
Capital gains and dividends -- No proposal regarding the tax treatment of capital gains and dividends. Calls for preserving tax benefits for “retirement security,” which probably refers to the current tax treatment of 401(k), IRA, and defined benefit plans.
Alternative minimum tax -- The framework eliminates the alternative minimum tax.
Corporate tax rate -- It lowers the corporate income tax rate from 35 percent to 20 percent, as well as eliminates the corporate alternative minimum tax.
Pass-through tax rate -- Creates a new maximum tax rate on pass-through business income, of 25 percent. Calls for, but does not specify, rules for combating abuse of a top tax rate on pass-through business income that is lower than the top tax rate on wage income.
Capital investment -- The framework allows for full expensing for capital investment for at least five years.
Tax treatment of interest -- Calls for a partial limitation of the interest deduction for C corporations, with no additional details. Provides no details about the treatment of interest paid by pass-through businesses.
Business credits and deductions -- Eliminates the section 199 manufacturing deduction. It calls for the elimination of other business credits and deductions, without identifying specific provisions. Additionally, includes preserving the research and development credit and the low-income housing tax credit.
International income -- Moves to a territorial tax system, in which foreign-source profits of U.S. companies are not generally subject to U.S. tax upon repatriation. Calls for, but does not specify, a global minimum tax intended to protect the U.S. tax base from cross-border income shifting.
Deemed repatriation -- It enacts a one-time tax on previously accumulated foreign-source earnings. Calls for a lower tax rate on liquid foreign assets and a higher tax rate on illiquid foreign assets, but does not specify either rate.
Estate tax -- The framework eliminates the estate tax and generation-skipping taxes.
8/31/17-A Little Slice of Democracy
August 25th was a big day for UBCC advocacy. We smashed attendance records at our annual State of the Union Legislative Series Breakfast, and then proceeded to a low-key reception for the largest grant ever earned by our region's Chamber. To all who took time away from competing obligations to participate and show support, we thank you sincerely. Advocacy is your Chamber in action -- and that activity has brought us into harvest season. Major grants from the PA DCED don't just fall from the trees, nor do federal elected officials from both the US House and Senate just sprout up at an event. Vision, passion and persistence -- amplified by ever-increasing member engagement -- is now paying dividends. The energy is palpable in our Legislative and Public Policy Committee meetings, and we are receiving more and more feedback from both the general membership and the broader community – this includes asks to consider the pros, cons and potentially make endorsements on specific issues of significant consequence. Our small microcosm of democracy is deliberate, and most importantly collegial, as we together seek consensus on positions that reflect the broadest collective good for our membership organization – and the communities we serve. In this spirit, I was personally thrilled with the overarching tone of civility at our State of the Union – and specifically inspired in agreement with remarks from our Congressman that can be paraphrased: the biggest threat facing our communities, and our great nation, lives in the way we talk to one another. Or talk past, ignore, shout with absolute certainty or denigration – instead of listening, empathetically seeking common ground, or at the very least just being civil to one another. A resultant corollary to this phenomenon was reflected in the considered response by the Senator on the topic of all things, the proposed Great Wall – he noted that a more comprehensive solution to very real problems had already garnered 68 votes, a rare super-majority in the Senate, and perhaps starting from there could actually bring about real, positive change. We are navigating uncharted political waters now in 2017, and both the tone and substance of both Congressman Fitzpatrick and Senator Casey before our business community was hopeful for better days ahead. And as far as your Chamber is concerned in advocacy, we aspire to reflect the will and best interests of our entire membership – to do this right, we need a robust feedback loop. Our Legislative Series provides that opportunity and purpose – and we are thrilled that so many came out and shared in a little slice of democracy. Please know the “Suggestion Box” is always open, and interested folks are always welcome to participate on our Committee.
8/17/17-Join Us With Congressman Fitzpatrick and Senator Casey!
The excitement is building for our Chamber’s annual Legislative Series event focused on National Issues. This year we are proud to feature elected officials from both the US House and the US Senate – a collegial and bipartisan representation with Congressman Brian Fitzpatrick and US Senator Bob Casey. Everyone should come away learning something new and substantive about what’s actually happening under our Nation’s Capitol dome. This gathering is more critical than ever in this new era where in the national media, especially cable, the signal-to-noise ratio is so out of whack – with too much coverage lost in the chasing of shiny objects. So, to have an opportunity to ask your own questions, face-to-face, is almost priceless. Special events like this Friday’s provide a critical feedback loop, for all participants – and ensures our members’ voices will be heard. It speaks to our times that this should even be noted: We are fortunate to have responsive elected officials, especially in these uncharted political waters where so many politicians have just gone into hiding. Having Congressman Fitzpatrick and Senator Casey come to the Upper Bucks Chamber of Commerce in cooperative bipartisanship is a big deal and rare opportunity. We are extremely pleased that this year we’ve broken attendance records for the entire Legislative Series. But the great turnout, alone, is not the end-all. It’s the thoughtful, respectful and problem-solving dialogue -- driving mutual understandings of issues that truly are much more complicated than mere talking points -- that helps UBCC advocacy in the long term. And advocacy is our Chamber in action! IMPORTANT: This event is strictly RSVP, so you will need to register.
7/27/17-Budget, Healthcare…What About Local Traffic?
With little new to report beyond speculation and second-guessing about how Our Commonwealth will actually *pay* for the spending plan that lapsed into law – or what on earth will ultimately happen with Repeal-Replace and our National Healthcare System – we do have some *breaking news* on our region’s transportation and infrastructure. Let’s call that a tease: by Popular Demand, UBCC is re-booting the Transportation Committee, which had been on hiatus for some time now. Concerned Municipal Leaders and stakeholder businesses have reasonably concluded that chaos happens to you – if you let it. Here in the Dog Days of Summer, our region travels through sub-optimal traffic patterns that had better maps at the outset – but for the sake of expediency, convenience to some developers and the mousetraps of bureaucracy – let’s just say stuff happened. But right now we have a Perfect Storm – or Once-in-a-Generation Opportunity, glass half-full – to synchronize and optimize with three major land development projects getting underway simultaneously. With St. Luke’s University Hospital set to build on Route 663, Lehigh Valley Health Network having big plans impacting Route 309 and Pumping Station and Portzer Roads – and Quakertown Community School District readying a major project in between – there’s no time like now to get it all right. If you are interested in joining the UBCC Transportation Committee, please give me a call or shoot me an email – invites to attend our first meeting on August 4th are going out this morning to folks who have expressed interest and who were otherwise members when the Committee was active.
7/6/17-And So, How To Pay For It?
This is a question we’re all forced to grapple with as family units. We face, embrace and make tough decisions daily in business. The questions naturally get tougher the bigger the budgets, the number and scope of items on the wish-want-need list – and the process gets muddy when you delegate 253 cooks to the kitchen to make soup with an also-elected executive chef. After the surreal optics over the weekend of our neighboring governor basking on a budget-impasse-closed beach, and with a multi-month shutdown here in the Keystone State still a recent memory, it would be tempting to call what we have now – a spending number without a plan to actually pay for it – a step in the right direction. It’s also tempting to call it a step in something else. What is the least tempting is to look in our own collective mirrors and ask what can we do better as citizens, as business and community leaders. What problems, issues, priorities and suggested solutions are we bringing to the table? Working with elected officials and bright, dedicated staffers over many, many years, I’ve come to appreciate their collective integrity and desire to do right by their constituents. There are always exceptions, of course, but my point is that it is all too easy to bash, mock, and now increasingly, demonize politicians. And the press. The 253 members of the Pennsylvania General Assembly get mixed messages from constituents back home, and mixed messages from professional advocates in Harrisburg – add in grassroots and astroturf issues campaigns, and it gets hard to find the signal from the noise on a good day. This all makes the work that we do here at UBCC all the more important – engaging with our elected officials and senior staffers at all levels of government: municipal, county, state and federal. Month over month, more members representing more diverse lines of business are coming out and listening, sharing and engaging – and our group conversations are making a difference one issue at a time. At the very least, each member can add to the critical feedback loop that is vital to representative government – whatever the issue or concern, and whether you can make a meeting or not, just send an email our way and we’ll share. Our elected officials in Upper Bucks are responsive, demonstrating consistently a willingness to hear and act on our behalf with a clearer understanding of a tangible pro’s and cons. So, how to pay for the $32 billion spending plan that was sent to the governor last Friday, which will need more than $2 billion to fully fund? The available options are all unwelcome: Borrowing. Even more gambling. Increasing and/or expanding taxes. And the one-off: Shifting money between funds.
In the words of PMA President David N. Taylor the other day: “Pennsylvania’s economy continues to underperform. Predicted revenue growth at the start of the fiscal year was much too optimistic. Now, state government has to backfill last year’s shortfall and fund the additional spending in this year’s plan.” Legislative leaders say they hope to patch together a revenue plan before Monday at midnight when the spending portion becomes law with or without the governor’s signature. Once the plan is finalized, rank-and-file members will be called back to vote on it. Behind some of the reasons for the shortfall lie recurring year-to-year increases in spending -- human services increases are the largest -- coupled with sluggish revenue collections due to an economy grudgingly emerging from the Great Recession. Other culprits include last year’s budget when the lawmakers similarly sent the governor a spending plan first then a revenue package later. At the start of the previous fiscal year, they overestimated overall revenue receipts to the tune of $1 billion. In one instance, revenue from a newly enacted 40 percent tax on vape shops came in 70 percent less than predicted. Many shops simply shut their doors because they couldn’t come up with 40 percent of the value on their shelves called for under the new tax. Simultaneously, budget experts underestimated the cost of human services; a $400 million supplemental had to be added to cover overruns. The governor has indicated he’s willing to agree to a revenue package lawmakers send him, even without his often-requested additional tax on energy production. However, given the constitutional requirement of a balanced budget leaders have to find the money somewhere. They could include all or portion of a massive gaming expansion earlier approved by the House; approve a tax on drinks; take money from solvent funds and put it in the General Fund; borrow against tobacco settlement money. Adding debt could lead to an even grimmer fiscal situation next year. It's worth noting that lawmakers did approve legislation that’s at least a start at public pension reform. Pennsylvania must improve our fiscal health or we risk sinking so low that we can’t dig our way out. Illinois is a case study in how bad it can get -- having $15 billion in unpaid bills and owing a quarter-trillion dollars to public employees when they retire. Our glass-half-full here in the Commonwealth is the news we're not yet on the verge of junk bond status -- but budget season ain't over till the how to pay for it gets passed into law.
6/15/17 - We the People
I was planning to dive into the weeds on the "historic" pension reform that passed the PA legislature and was just signed by the Governor. While some have lamented reforms went too far, and others decried it doesn't do nearly enough especially short term, it seems by all accounts far better than nothing - with much upside in years out. But I 'm working from bed with my back out - giving me the misfortune of cable news in the background. Prospecting on LinkedIn yesterday, I watched the tragedy of the horrific spectacle of a madman hunt down elected federal officials, staff, lobbyists and protectors in blue. It is a miracle that no fatalities other than the assailant occurred, and we as a people pray for full recovery for those injured unjustly. Flipping through channels yesterday and this morning, I'm lucidly embracing the multiple Americas represented by tone, presentation and selection of emphasized facts targeted purposefully by big data and demographic selection. All puzzle pieces of a bigger picture, an increasingly elusive, shared and unifying reality. A phenomenon paralleled in the digital world, with self-selecting social media bubbles and hyper-demographic targeting. Yesterday's almost-massacre was an atrocity - seemingly politically motivated, possibly definable as domestic terrorism, and clearly carried out with defective mental hygiene. It is not the first, and probably won't be the last - and the cause and effect speculation is only natural. As it was with Congresswoman Gifford and the innocents around her, this is an opportunity to hit the reset button on vitriol, and rethink the words of Rodney King: why can't we all get along?! Without casting blame or pretending easy solution, it is worth pointing out that agitating the masses is big money - for media entertainers, political consultants and issue groups in constant fundraising mode. In my years lobbying in D.C. in the wake of the Great Recession, while real estate markets imploded everywhere in the land of We the People, an incredible phenomenon occurred - coinciding with Citizens United and the waterfall of coin, construction cranes were everywhere. A new skyline appeared just off our National Mall - occupied by white collar factories and workers peddling influence - many employing the dark and insidious arts of passionate polarization of the masses, targeting by micro-audiences. It is a world and worldview far apart from shared, humble and respectful values we embrace in Upper Bucks. And it makes me all the more appreciative for what we have here at UBCC, with our thoughtful and deliberative advocacy - our legislative committee dives into complex and contentious issues with mutual respect, curiosity and civil open minds. Our most recent Congressional debates were anything but hostile and alarmist - and we are blessed to have a rare district whose borders mirror We the People, and not strange objects shaped to propel incumbency. May we all continue to lead by courteous example here in our special place in the land of We the People, where passionate discourse need not be inflammatory - and at the end of the day we all just get along because the options, as expressed in yesterday's tragedy, are simply not an option.
6/8/17 - Bucks County’s Seat at the White House Table
For all the breathless coverage of today’s hearing featuring former FBI Director James Comey – set to be shown live on major broadcast and cable networks, with bars in D.C. opening early for whatever reason – there are plenty of goings-on under the media radar today in our Nation’s Capital. For instance, there is an Infrastructure Summit happening at the White House, where local government officials from across the country will discuss critical needs in their communities and help shape policy that turns “wish lists” into completed projects. We are extremely excited that Bucks County will have a seat at the table – and yes, this is kind of a big deal. County Commissioner Robert Loughery will be participating in today’s policy summit, giving our region a strong and compelling voice – and we’re proud to have such an able advocate in the room for these discussions, helping shape an agenda that will hopefully include Upper Bucks when all the dust settles. And on a culinary note, we keep hearing how amazing the meatloaf is at the White House – maybe Rob will get a chance to find out for himself. That will be just one of the questions we can ask about his experience, and his take on the future of infrastructure investment both locally and nationally – he says he’s excited to share his first-hand account with our Legislative Committee when we meet again the morning of Friday, June 30th. If you are not on the committee, but would like to attend, please shoot me an email – we’ll reserve your seat at the table, but know that space is limited. Also, please mark your calendars for State of the Nation on Friday, August 25th – this is shaping up to be a must-attend event.
6/1/17-How time flies!
How time flies. Today marks one full year here at UBCC, and I am truly excited about the energy and progress we have in Public Policy. We’ve educated members on a multitude of issues -- and forged consensus to engage on the harms of critical legislation, notably the “Great School District Property Tax Swap.” We’ve been collaborating with the school district and local municipalities in regular round tables to inform and share resources. We’re working with the technical school, community college, regional planners and our region’s manufacturers to address skilled workforce needs of today, and with the future in mind. And attendance – both for our committee and the legislative series geared for our membership – continues to build. We had a capacity crowd in the UBCC conference room last Friday as the committee engaged with representatives from State Senator Mensch, Congressman Fitzpatrick and US Senator Casey’s offices. The open, candid – and often passionate – exchanges between those in the trenches on issues from the Opioid Epidemic, Education, Healthcare, Broadband and Infrastructure (to list just a few topics covered) and our representatives was another fine example of our Chamber in action. We learned that issues near and dear, like pension reform, are steadily moving forward – however, we’re in the season where so many of the bigger puzzle pieces (state budget, healthcare and tax reform, for example) are just about to hit high gear. So this window gives perfect opportunity to throw some love towards an otherwise obscure piece of legislation – giving honors long overdue to heroes of World War II. HR 2701 and S.1256 – These are Bills “to award a Congressional Gold Medal to the 23rd Headquarters, Special Troops and the 3133rd Signal Service Company in recognition of their unique and distinguished service as a "Ghost Army" that conducted deception operations in Europe during World War II.” The legislation is non-controversial, and has bipartisan support – we’re hoping that before another Post Office is renamed, Congress will act to honor these heroes, including many from here in the Commonwealth. And maybe you would like to hear the story behind this elite unit directly from the veterans themselves – and the author and director of the NYT best seller and PBS documentary: They’ll be at McCoole’s Red Lion this Saturday and Sunday!
5/4/17-An Early May Roundup
We’re following a number of developments on the local, state and federal level. It’s always a challenge to prioritize, and frustrating to update that the big news on an important topic is basically the pressing of a re-set button. But that’s the latest on the ongoing redevelopment plans for downtown Quakertown’s Triangle Park – as it is with the repeal-and-replace of the Affordable Care Act. Third time’s a charm? For all those asking what is going on with the plans introduced back in 2014 to turn the downtown parking lot and park into a 3-story beacon of dining, drinking, shopping and productive office working, the short answer is…the project is not dead. The Borough will ask for a third – and likely final – extension of the $2M Redevelopment Assistance Capital Program (RACP) grant that was to be the anchor funding, and was set to expire. Presumably, the grant will be extended and clocks reset another six months – giving the Borough occasion to give a last call to the developer, and some time to solidify Plan-B. So this time, we should really, really know by the 4th of July. And keeping with the third-time theme, all indications as I write are that the US House will again try – today – to Repeal-and-Replace the ACA, aka Obamacare. Margins are said to be flip-a-coin, and it’s been pulled twice before, so we’ll see. But since prior objections from Centrists have not been met – notably, that efforts of this magnitude at least attempt to reach across the aisle – smart money has the current scheme DOA in the US Senate. What is particularly concerning is the rush to vote – and this has been years in the making – without a CBO scoring of the associated costs, and impacts on projected coverage. And in the doomed to repeat history department, we’re hearing again the unsettling refrain of “we need to pass it to find out what’s in it” – which is not a situation that inspires confidence. Perhaps first read the bill, then second, abide the Hippocratic oath. However this goes, there’s still a lot more grinding left for this massive piece of sausage. In other news, we heard last week that PA Budget negotiations are getting into the serious stages – and good news that the Great Property Tax Swap is less likely to be one of the essential puzzle pieces in any final deal. And more good news, that Pension Reform most likely will be. To update on a previous column that warned that Digital Privacy Protections were inexplicably targeted for repeal – they were actually repealed, and as we all know shopping around for broadband providers is not like choosing between Coke and Pepsi. And reading terms of service is not like reading a Mothers’ Day card, so if you need any help we’ll do what we can. Unfortunately, that’s not all that’s on the chopping block of consumer and small business protections provided by Federal Communications Commission (FCC) regulations – the landmark Open Internet safeguards are now in the bullseye, as are limits on local media consolidation. We are blessed in Upper Bucks with the rare phenomenon of local, family-owned media outlets – WFMZ, The Intell, Bucks County Herald, Penny Power, Upper Bucks Free Press. Most communities across the state and country are dominated by corporate-owned outlets, part of the trend of consolidation from the mid-90’s on. So we’ll be watching FCC policy with an eye towards threats to the competitive sustainability of our dear hometown media. As always, please share your feedback on the above – or any issues you think UBCC should be addressing.
4/27/17-State of the State
We’re looking forward to an informative Legislative Breakfast tomorrow, part two of our three part series with local, state and federal officials. On hand to address our Chamber gathering will be State Senators Mensch and McIlhinney, along with State Representatives Staats and Quinn. And I’ve just learned that our series sponsor, Grand View Health, may be sharing some exciting news on their end, too. With barely two months before the Commonwealth’s Budget is constitutionally due, expect a deeper dive into the very real numbers that are being discussed. Now that all the hearings have been held on the Governor’s Plan, and the House has moved forward with its starting-point framework, specifics are emerging. Those include consolidation of state agencies, which some argue will impact services – and there are major cuts to essential programs that could force Counties to raise Property Taxes, news our Commissioners shared with us a few weeks ago. Are new Revenues on the table in current discussions – like broad-based levies including PIT and/or SUT, or sector-specific tax increases or so-called “loophole” closings? We’ll be listening intently. We can expect updates on other sources of proposed new revenues, including the further expansion of gambling, more tweaks to the PLCB and possibly even the legalization of marijuana for recreational – taxable – use. Hopefully we’ll get an update on the status and who supports/opposes the Great School District Property Tax Swap – aka SB 76 – and what’s being done to address the cost-drivers and unfunded mandates that fuel those ever-increasing taxes. Starting with, where are things with Pension Reform? What is the status of Charter School Reform? Bonus updates might address where things stand with compliance with Federal Real ID laws – as it stands, millions of Pennsylvanians may soon need to get passports to travel domestically by plane and even enter many government buildings. We might also hear updates on the Opioid Epidemic here in Bucks and across the state – there’s been news of new initiatives and new funding proposed. Many of our fellow citizens only recently learned that over half of municipalities do not pay for local police protection – relying instead on the State Police, which in turn relies on funding that would otherwise go to roads and bridges. The legislature is looking at fixes to that peculiar mousetrap, too. Maybe we will learn about all of this and more tomorrow. Hope to see you there – participation is crucial to our democracy, and as business and community leaders, engagement is an obligation.
4/13/17-Great to Hear Directly from Our Elected Officials
Our Legislative Series kicked off last Friday with the “State of the County” presentation with Commissioners Martin and Loughery. It was great to see so many UBCC members in attendance for the informative session, by all accounts we broke records with over 70 coming out to engage in public policy. We were also excited to have the Commissioners pop over to the UBCC office – and official gateway Visitor Center for Bucks County – for an update on all we have going on here as well. Over the last several months, we’ve bolstered interest in legislative affairs as witnessed in turnout, feedback and engagement – along with an active committee growing and tackling issues that impact our members. Among the legislative priorities shared by our County Commissioners, we embrace and look forward to working together with them and our municipal partners on Pension Reform and common sense changes to Prevailing Wage. Pensions are the main driver behind rising School District Property Taxes, and we’ve heard over and again about projects canceled, delayed and otherwise compromised because here in Upper Bucks the mandatory wage is pegged to Philadelphia as opposed to Lehigh County just a stone’s throw up the road. One Pennsylvania Budget-related alarm bell that is ringing in our ears is the Whack-a-Mole nature of intra-governmental affairs – that is to say, cuts may sound great in Harrisburg, but back in ground zero something has to give: Property Taxes? That is the warning from Counties across our Commonwealth, if the multi-billion dollar structural deficit is not addressed and funding for essential services gets slashed without any corresponding relief from other unfunded mandates. A looming increase in County Property Taxes adds fresh context to another contentious issue that is about to come full boil – SB 76 and the Great School District Property Tax Swap. The purists at the core of that movement have long argued that targeted reforms – such as just making sure that seniors of modest means get a pass, and the assurance they’ll never lose their homes – is a non-starter. Their mantra is that a citizen cannot “truly be free” if they are forced to pay Property Tax. But here’s the rub: the $14-15 Billion shell game to spike PIT and raise and expand SUT to just about everything, does absolutely zero to County Property Tax. Which is to say, that “freedom” component of the arguments would remain unfulfilled – and a lot of SB 76 supporters could be in for shock when they still get a Property Tax Bill from the County, and one that’s even bigger. We are still months away from the serious fine-tuning of the PA Budget, which makes attending the second of the UBCC Legislative Series, “State of the State” a must on Friday, April 28th. We have a strong delegation of our elected committed, with State Senators Mensch and McIlhinney, and State Representatives Staats and Quinn on hand to share the latest with our members directly.
4/6/17-Welcome, Bucks County Commissioners!
We hope to see you tomorrow for the first of our annual Legislative Series, “State of the County” with all three County Commissioners. You’ll be in good company with over fifty of your fellow Chamber members registered so far. We’ll hear from Chairman Charles Martin, Vice-Chairman Robert Loughery and Commissioner Diane Ellis-Marseglia, LCSW about the wide range of issues they are working on for the good of Upper Bucks and the County as a whole. Since last year's gathering, prominent hot-button issues have been addressed, including the repair and reopening of the crucial bridge on Milford Square Pike. Efforts continue to expand in the region's battle against the Opioid Epidemic, an issue that personally touches so many families, friends and peers. A few bright spots include the dedication to preserve Open Space and working family farms, with a large percentage of existing and new acreage here in Upper Bucks. And tourism, by measures of visitors and economic output, is on the rise -- it will get an additional boost with expanded efforts financed by new tourism-financed levies. It will be interesting to hear our County Commissioners' take on the State Budget proceedings -- their state association, County Commissioners Association of Pennsylvania (CCAP) has come out loudly in recent days in criticism of the House-passed spending plan. Their concern is that a "no-tax-increase" budget at the state level merely tosses the burdens back to Counties, where many might need to raise property taxes to meet the needs of their citizens abandoned by Harrisburg. It will be interesting to hear our own Commissioners' take on these and other pressing issues, and we look forward to hearing the questions our members bring to the table. This is a great opportunity to participate in the dialogue shaping our region, looking forward to seeing you there!
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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 215.536.3211.
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