Opioids, pensions top list of bills

Year ends with just 82 new laws added to the books

HARRISBURG -- Over the last decade, Pennsylvania lawmakers have enacted on average 128 new, non-budget laws annually. However, in the years lawmakers squabbled over the state budget for months after its deadline, they passed far fewer.

2017 was no exception.

Despite considering thousands of bills, only 82 new laws (that aren't state budget appropriations acts) were added to the books in a year that was dominated by discord.

Those laws include sweeping anti-animal cruelty legislation, what lawmakers call historic pension reform and bills intended to mitigate or respond to the opioid crisis that has stolen thousands of lives.

The lawmakers also greeted new colleagues to their ranks and said their final goodbyes to others, battled it out over proposals to tax natural gas extraction and bills to restrict abortions, reauthorized a welfare program that provides children with health insurance, saw the state receive a credit downgrade and made moves to fix the Unemployment Compensation System that had its fair share of fiscal problems.

And like most years, they left a few top priorities on the back burner until the new year.

At the close of 2017, Gov. Tom Wolf's administration and the caucus leaders of the Pennsylvania House of Representatives and Senate took the time to speak with Capitolwire and reflect on the year's accomplishments, outline their priorities for 2018 and look forward to the election that could alter the state's political dynamic for the next four years.

Budget stalemate, resolution

The 2017-18 budget process formally began in early February with Wolf's budget address to a joint meeting of House and Senate lawmakers. The Democratic governor proposed modest increases in spending and no broad-based tax hikes.

It concluded on Oct. 20, nearly four months after the Legislature approved a spending plan that became law without Wolf's signature, with a revenue plan to pay for it.

Looking back, Senate Majority Leader Jake Corman, R-Centre, contends the stalemate between the two chambers and the governor was the result of the previous year's budget shortfalls.

At the time of the governor's budget message, the state faced a $1 billion hole in the 2016-17 budget and a more than $2 billion deficit going into the next.

"I don't think there was anything about partisanship or the House versus the governor or the House versus the Senate. I think it was more just the deficit that led to the stalemate," Corman said.

"When you're looking at a $2 billion deficit, that's not easy to resolve," he continued. "Two years ago, there was sort of a spoil for a fight between Gov. Wolf and ourselves, and he proposed a huge tax increase and we opposed it. This wasn't the same case."

"It was just a matter of a huge deficit. It was unexpected. And any time you have these huge deficits, you either have to cut spending or raise revenue, and neither of those are politically popular to do. So, they're tough to get the votes for," Corman said.

Wolf's original proposal boiled down to a $32.6 billion plan with no broad-based tax hikes and modest increases in education spending, at least when compared to his previous spending requests. Spending would have been increased by $670 million, or 2.1 percent.

He sought to pay for the previous budget shortfall and 2017-18 expenditures by limiting spending and finding efficiencies in government operations, including merging agencies and closing state-run facilities.

His proposal offered nearly $2.1 billion in cost savings and included plans to arrange a lease-leaseback deal for the Pennsylvania Farm Show Complex and Expo Center and borrow $110 million from the Commonwealth Financing Authority. He also proposed to implement a severance tax on natural gas extraction; to broaden the Sales and Use Tax to apply to previously exempt products and services; reduce appropriations for tax credits and convert them to block grants; to flat-fund Pennsylvania's state-related universities and community colleges; to reduce state funding for school transportation; to raise the minimum wage and more.

After some contentious debate, on the June 30 deadline, the Legislature approved a $31.996 billion spending plan, an increase of approximately $54.3 million over 2016-17.

The spending plan included a $431.9 million investment in education, with $100 million going to basic education, $25 million to Pre-K counts and $25 million for special education. All five leaders touted this accomplishment. State-related universities and community colleges were flat-funded, while the State System of Higher Education received an additional $8.8 million.

It also included cuts to certain human services' programs and funding for school testing; the closure of a state prison; additional money for opioid overdose medications, behavioral health services, state field supervision of parolees, Head Start Supplemental Assistance, the legislative caucuses and certain educational and job training programs, to name a few components.

Wolf, for the third year in a row, did not sign the spending plan when it arrived on his desk. It would be four more months until a revenue plan, relying mostly on one-time revenue, was set into action.

The final plan, approved by both chambers, included a $250 million gaming expansion component long promised by the Legislature, $1.5 billion taken from the state's Tobacco Settlement Fund, $300 million in transfers from various state special funds, a $200 million transfer from the nonprofit Pennsylvania Professional Liability Joint Underwriting Association, a new tax on consumer fireworks and a requirement that third-party vendors who sell items on internet marketplaces remit the state's sales tax if they don't currently do so.

In addition, Wolf signed the Administrative Code bill, which included language to allow for the potential consolidation of the Departments of Health, Human Services, Drug and Alcohol Programs and Aging, hikes to state fees and a prohibition on closing state facilities without a public hearing, among other provisions.

He vetoed the Human Services Code bill and left the Public School Code bill unsigned, as he opposed provisions within them to impose certain work requirements on welfare recipients and allow schools in times of economic hardship to furlough teachers based on performance rather than seniority.

Successes and failures

Ultimately, all sides agreed they accomplished some priorities and conceded others.

House Majority Leader Dave Reed, R-Indiana, said the Republican-led House rallied against broad-base tax increases and won. Wolf and the Democrats emphasized their work to dedicate more money to education.

"Governor Wolf continued his fight to restore the cuts made to education at all levels under the previous administration, including basic education, pre-K, career and technical, and higher education," wrote J.J. Abbott, Wolf's press secretary, in an email.

Corman did, however, acknowledge they should've approached the budget differently given the circumstances.

"I don't know if there's a sort of legislative solution that would prevent us from having difficulty solving a $2.2. billion deficit. There's nothing wrong with the mechanics of state government," he said.

On passing a spending plan before the revenue plan was finalized, Corman added: "I think that the theory behind it was good. The fact that it locked down spending, so you wouldn't be using spending to buy votes like they did in 1991."

"Having said that it sort of took pressure off to get anything done," he concluded. "And it was probably a mistake in hindsight."

Legislative accomplishments

Aside from the resolution of the budget stalemate, lawmakers also found common ground to pass sweeping anti-animal cruelty legislation, public pension reform and funding needed to resolve the state's Unemployment Compensation System's troubles.

Following many failed attempts to resolve the state's surmounting public pension debt, Wolf signed into law legislation to create a menu of retirement plan options from which new hires enrolled in the state's two pension systems would be required to choose from.

"After years of discussion and the House passing one version, the Senate passing another and the Governor coming out for another, we were actually able to work through the differences," Reed said of passing the public pension bill.

"That was probably the No. 1 accomplishment for the year from a public policy perspective because it not only impacts the state in the short term, but it has long-term consequences, like helping to shore up our budget situation and to protect retirements for our state and school district employees," he added.

The three choices that would replace the current defined benefit plans for future employees are two different types of side-by-side hybrid (with both defined benefit and defined contribution elements) along with a defined contribution-only, similar to a 401(k), option.

The law is expected to reduce the system's $76 billion unfunded liability by $420 million and increase employer contributions by $57 million. It was also suggested that the legislation could save additional, albeit indeterminate, money by way of risk-shifting due to the defined contribution component in the benefit design.

Satellite casinos coming

The passage of gaming legislation was on shaky grounds at the start of session, with no resolution on the horizon. However, the lawmakers were able to compromise to fulfill a budget promise left unaddressed at the end of the 2015-16 session.

The expansion will allow for ancillary casino licenses, legalize video game terminals at truck stops and iGaming and authorize gaming tablets at airports, among other changes. It's anticipated to rake in $250 million annually.

Wolf and the Legislature also approved legislation to aid the Unemployment Compensation System's chronic technology and staffing problems.

Wolf signed a law Dec. 20 providing $115.2 million in additional funding to the UC benefits system during the next four years. The legislation authorizes annual transfers, which decline over time, from the Service and Infrastructure Improvement Fund to operate the system and pay for a computer modernization project.

One year ago, the Department of Labor & Industry furloughed 500 employees and closed three UC call centers, leading to prolonged wait times for individuals seeking determinations of their eligibility for benefits.

In April, the Legislature also approved a $15 million appropriation to temporarily rehire 200 employees and reopen the Altoona call center. The money approved this month will enable the department to hire more employees and improve the system.

Wolf also signed into law bills intended to address the opioid crisis, including one he signed last week to give the Department of Drug and Alcohol Programs regulatory authority to license or certify recovery homes that receive public funds or referrals from state, county, or federal agencies.

"It is a priority of my administration to do all it can to fight the heroin and opioid epidemic," wrote Wolf in a press release. "Recovering from the disease of addiction is not an easy task and it's our job to ensure that recovery homes, where residents should feel safe and protected, are adhering to the highest standards so residents have peace of mind to focus on getting well."

Fighting animal cruelty

In an event that showed bipartisan compromise, Wolf and the Legislature also enacted Libre's Law, legislation intended to curb animal abuse.

The law will elevate punishments for individuals found guilty of animal abuse and neglect, making it more likely those offenders will receive higher level charges such as a misdemeanor or felony, among other changes.

In addition, Wolf also "fought to protect Pennsylvanians from extreme changes at the state and federal level," like President Donald Trump and the Republican party's calls to repeal the Affordable Care Act and "throw millions off their health care," said Abbott.

He also "worked to expand career and technical training and grow Pennsylvania's economy by starting new manufacturing and apprenticeship programs," Abbott said.

Corman touted his chamber's approval of work requirements for welfare recipients, which were included in the Human Services Code bill, and legislation to crack down on "sanctuary cities," though neither of those measures were enacted into law.

He also praised the Senate's approval of a "paycheck protection" bill that would've prohibited the use of taxpayer dollars for payroll deductions that are used for political purposes. The bill was defeated in the House, though it may be reconsidered next year.

Reed applauded the enactment of provisions in the Public School Code to protect high-performing teachers in times of economic hardship.

The minority leaders of the House and Senate -- Rep. Frank Dermody, D-Allegheny, and Sen. Jay Costa, D-Allegheny -- commended lawmakers' work to reauthorize the Children's Health Insurance Program which was set to expire in December. Wolf signed the bill into law, however, the federal government has yet to approve long-term funding for the program.

Costa also touted legislation to prohibit "lunch shaming" in schools and enable municipalities to replace or remediate private water and sewer laterals and address lead pipes in homes.