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Legislative Update

Week Ending Oct. 10, 2008

• Governor Praises Legislature, Calls for Continued Progress
• Governor Touts Energy Bill
• Spot Assessment Bill Approved, Veto Expected
• Debt Management Services Act Goes to the Governor
• Ban on Mandatory Overtime for Nurses Goes to Governor
• Elm Street Bill Goes to Governor
• Memo Warns Next Year State Deficit of 'At Least $2.5 Billion'
  

Governor Praises Legislature, Calls for Continued Progress

Gov. Ed Rendell Oct. 9 hailed the approval of legislation by the General Assembly to help consumers cut their energy bills, reform Pennsylvania’s inadequate dog law, prevent mandatory overtime for nurses, and strengthen penalties against those peddling illegal guns.

“Today is a great day for Pennsylvania’s consumers and man’s best friend,” said Governor Rendell. “Additionally, the legislature has passed important measures today that also protect the public’s health and safety by ensuring nurses and patient caregivers are not forced into working overtime and that will punish criminals who dump illegal guns onto our streets.”
  
While acknowledging the achievements in the final day of this legislative session, the governor expressed his disappointment that the General Assembly adjourned without acting on legislation such as health care reform and electricity rate mitigation.

“Although health care and rate cap mitigation were not among the bills delivered to my desk, there is hope that we can continue making progress on these vital issues,” said the governor. “These are two issues of vital importance to our economy and the livelihood of Pennsylvania’s families and businesses. 

“On health care, the House passed a very good bill, but the Senate failed to act. It’s cruel, wrongheaded, inappropriate, and inexplicable. On energy, the utilities have been unrealistic in what they were willing to offer to consumers when rate caps come off. I am not going to stand by and watch while Pennsylvania’s electric utilities—which are already making record profits—double those profits on the backs of Pennsylvania’s citizens.

“I am deeply disappointed we could not resolve these issues for the people of Pennsylvania, but I’m committed to seeing these issues through.”

In Jan. 2007, Governor Rendell introduced Prescription for Pennsylvania.  The cornerstone of that plan was Cover All Pennsylvanians (CAP)—a program to provide access to affordable health care coverage to uninsured Pennsylvania adults.

In March 2008, the House passed a modified version of CAP, called Pennsylvania Access to Basic Care—or PA ABC—which would have covered 272,000 adults.

Senate Republicans developed their own health care reform plan, but it and the House proposal were too far apart to be reconciled.

Governor Touts Energy Bill

Gov. Rendell hailed the legislature for approving an important tool consumers will be able to use to reduce their electricity bill by an overall $500 million over the next five years and put Pennsylvania among the leading states that mandate utilities to conserve energy.

House Bill 2200 will require electric companies to reduce electricity consumption, particularly at times of peak demand when electricity rates are highest. Electric utilities that fail to meet the law’s requirements would face steep financial penalties.

The legislation also will require every home and business in the state to be equipped with “smart meters” over the next 15 years. A smart meter gives consumers the power to better control their energy consumption, enabling them to use energy when it is cheapest and reducing use at times when it is most expensive. In addition, electric utilities will be required to offer customers new pricing plans that would reward customers who shift their demand to off-peak hours.

The legislation also gives utilities the tools they need to purchase sources of energy at the lowest possible price. Existing law restricts the ability of utilities to use the full power of the free market to purchase energy at the lowest possible price for consumers.

Spot Assessment Bill Approved, Veto Expected  

Although legislation limiting local taxing districts’ appeals of property assessments passed both the House and Senate this week, sending it to Governor Rendell for his approval, amendments made by the state House Tuesday have prompted a veto threat from the governor.  

Senate Bill 1258 includes language that would limit local taxing districts to appeal an assessment only when a property is subdivided, improvements are added or removed, or a change of land use has occurred on the property.  The bill would apply to counties of the 2A through 8th class, including all but two counties in the state.

"My administration worked hard with members of both parties to find a compromise that protects new homeowners from unfair reverse appeals while looking out for the interests of all taxpayers by preserving the ability of school districts and municipalities to ensure that everyone pays their fair share of property taxes," Rendell said prior to the bill’s approval in the General Assembly Wednesday. "I am disappointed that the current version of SB 1258 does not reflect the compromise to which all parties agreed. I am committed to cutting property taxes for Pennsylvania homeowners. Unfortunately, this bill does just the opposite – it increases property taxes for those who can least afford it."

The General Assembly passed a similar bill in July, but the governor vetoed the legislation. The governor now has until Oct. 19 to either once again veto the legislation, or sign it into law.

Debt Management Services Act Goes to the Governor

On Wednesday, Oct. 8, both the House and Senate signed House Bill 2294—the free-standing Debt Management Services Act—and sent it to the governor for his approval. Gov. Ed Rendell signed the bill into law the next day. Once implemented, the Act would help reassure consumers seeking financial management services that they are working with reputable organizations and individuals.

“This legislation grows out of my efforts to create state policies that help people become financially literate,” said the bill’s sponsor, House Appropriations Committee Chairman Dwight Evans (D-Philadelphia). “This is a commonsense measure that is good for consumers, especially in light of current economic conditions. More and more people are in debt. More and more people need help. But we can’t let people in a vulnerable financial situation be taken advantage of by companies or organizations who are supposed to help them strengthen their financial position.”

HB 2294 would give the Department of Banking oversight over persons providing debt management services, including providing for an application for licensure and continuing education requirements, as well as creating certain fee parameters and necessitating that counselors provide consumers with clear, reliable information regarding their finances on a regular basis. The bill also gives examination powers and administrative enforcement powers over licensees. Civil penalties of up to $10,000 for violators of the act may be applied.

Among those exempt from licensure include CPAs, attorneys, banks and credit unions, title insurance companies, judicial officers or persons acting under court order, and licensees under the Mortgage Bankers and Brokers and Consumer Equity Protection Act.

The Act will take effect 120 days after the governor’s approval, or Feb. 6, 2009.

Ban on Mandatory Overtime for Nurses Goes to Governor

Both private and public hospitals and other health care facilities will be prohibited from mandating nurses and other direct patient care workers to work overtime under a bill signed into law this week.

House Bill 834 bars hospitals and other health care facilities from mandating overtime for nurses, except in specific emergencies or when unforeseen staffing shortages could compromise patient safety. It allows nurses to voluntarily work overtime, and prohibits hospitals from disciplining or firing nurses who refuse to work overtime.

Governor Rendell signed the bill into law on Oct. 9. The state Department of Labor and Industry will set to work promulgating regulations for the legislation before the act goes into effect July 1, 2009.

Elm Street Bill Goes to Governor  

A bill to revise the Elm Street Program by allowing it to continue beyond its current sunset date of 2011 was signed into law by Gov. Rendell on Oct. 9. The program is an urban residential enhancement initiative that targets older established neighborhoods for revitalization.

House Bill 2233 would allow Elm Street managers to continue for up to an additional five years, if necessary. The measure would also have Elm Street managers work to promote the establishment of consumer services, such as banks, grocery stores, and pharmacies, in older urban residential neighborhoods.
  
The Elm Street Program is administered by the Department of Community and Economic Development, and is similar to the existing Main Street Program. Main Street focuses on revitalizing downtown commercial districts while Elm Street targets residential districts close to those commercial districts.

Memo Warns Next Year State Deficit of 'At Least $2.5 Billion'

Just three months after passing the current state budget, legislators and administration officials are looking at an already $281 million revenue shortfall.

This week, a memo was circulated to lawmakers warning that the 2009-2010 potential deficit “could reach as high as $3 billion,” prompting heated questions from members of the state Senate Appropriations Committee during an Oct. 6 hearing with recently-appointed Budget Secretary Mary Soderberg.

When asked about the administration’s plans to identify ways to curb spending, Soderberg told members that Gov. Rendell had told agencies to prepare to cut 4.25 percent of their “discretionary” budgets, and that the state was identifying $78 million in additional cuts.

To that, Minority Chairman Vince Fumo scoffed, “You’re talking $78 million. We’re talking billions. At this point that is chump change.”

Later, a spokesman for Gov. Ed Rendell dismissed the $3 billion deficit projection as a “doom and gloom scenario” that he hopes is “over-stated.”

However, the memo’s estimated shortfall is based on alarmingly real figures:

• $1 billion or more in estimated revenue loss for the current fiscal year
• More than $200 million of one-time revenue sources in the current budget
• $125 million to cover the continued phase-out of the capital stock and franchise tax (CFST)
• $100 million increase in corrections cost, which includes the cost of inflation and similar procedural items
• $1.1 billion or more increase in welfare spending, to cover “rising caseload, child welfare, continuing lost federal revenues exceeding $300 million, rising health care cost index, … several hundred million [dollars] worth of one-time funds in the current budget, and mandatory cost increases of current program expansions”

Gov. Rendell continues to claim that Pennsylvania is relatively well-off compared to the national average, and that his administration will continue to forestall the state’s economic downward trend.