Week Ending June 5, 2020

Jun 05, 2020

After Pennsylvania Primary Many Races Still Hang in the Balance

The dust is settling from one of the most confusing and unclear election nights in recent memory as every county processed a unique blend of mail-in and in-person votes.

For the first time, all Pennsylvania voters had the option to apply for and submit a mail-in ballot. About 1.8 million Pennsylvanians voted via mail-in or absentee ballot – a number that is 17 times greater than the number of people who voted by absentee ballot in the 2016 presidential election. At this point, the count of mail-in and absentee ballots vary in each county. On June 1, Gov. Tom Wolf issued an executive order that extended the deadline for six Pennsylvania counties – Allegheny, Dauphin, Delaware, Erie, Montgomery, and Philadelphia – to receive ballots by mail. They will be accepted through 5 p.m. on June 9, as long as they were postmarked by June 2.

Five active and former CPAs seeking election or reelection in the Pennsylvania House of Representatives are holding strong going into the general election. The “CPA caucus” gained a 6th CPA legislator with Nick Pisciottano, CPA, who was running for retiring Rep. Bill Kortz’s seat in the 38th District in Allegheny County.

Below is a rundown of the status of some key races as of June 5.


The Democratic party's race for auditor general is the only contested statewide race, with six candidates seeking the party’s nomination. Unofficial results have Michael Lamb leading. Lamb will face Timothy Defoor, who won the uncontested Republican race. In the race for state attorney general, incumbent Joshua Shapiro (D) and challenger Heather Heidelbaugh (R) had uncontested primaries and will face off in November. Joseph Torsella (D) and Stacy Garrity (R), both also with uncontested primaries, will square off for state treasurer.

State Senate

As reported in the Philadelphia Inquirer, incumbent state Sen. Larry Farnese (D-Philadelphia) lost his primary race to progressive contender Nikil Saval. In the 17th Senatorial District, Democratic candidate Amanda Cappelletti has a lead over incumbent state Sen. Daylin Leach (D-Montgomery).

In the 25th Senatorial District currently occupied by retiring Senate President Pro Tempore Joe Scarnati (R-Jefferson) state Rep. Cris Dush (R) holds a lead of more than 10,000 votes.

State House

Republican Robert Mercuri – the candidate chosen by House Speaker Mike Turzai (R-Allegheny) to replace him in the seat when he retires at the end of the year – holds a sizable lead. In the 106th House District, state Rep. Tom Mehaffie appears to have won a three-way primary race against Republicans Mimi Legro and Chris Lupp in an effort to secure a second term. In the neighboring 104th District, state Rep. Sue Helm (R-Dauphin) holds a sizable lead over challenger Travis Stauffer.

U.S. Congressional Races

One of the most closely watched Congressional races in the nation was in Pennsylvania’s 10th Congressional District, and the race remains too close to call. The most recent reports have state Auditor General Eugene DePasquale holding a lead over Tom Brier for the opportunity to face off against Republican U.S. Rep. Scott Perry in the fall.

Rep. Brian Fitzpatrick (R-Bucks) holds a sizable lead over pro-Trump Republican Andrew Meehan in the Republican primary for Pennsylvania’s 1st Congressional District. Rep. Fitzpatrick will be the keynote speaker at this year’s online PICPA Annual Meeting on June 12.

Toss-up Congressional races include the GOP race for Pennsylvania’s 5th Congressional District, where Dasha Pruett holds a single-digit lead and the 7th Congressional District, where former Lehigh County Commissioner and Trump-endorsed Lisa Scheller leads by a slight margin. The Republican primary race for the 8th Congressional District is, according to Politics PA, the state’s closest. Jim Bognet holds a 1% lead over his next closest opponent, and the winner will run against Democratic U.S. Rep. Matt Cartwright in the fall general election.

Proclaimed winners in Congressional Democratic primary races include Sarah Hammond in the 11th District and U.S. Rep. Mike Doyle, who secured just under 70% of the vote against his opponent in the 18th Congressional District. Doyle will face off against Republican Luke Negron in November.

For an updated and comprehensive rundown of results, check out the Pennsylvania Department of State.


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Wolf Addresses Law Enforcement Reform and Accountability

Gov. Tom Wolf announced several actions to improve law enforcement relations with the community and strengthen training and accountability. Wolf outlined multiple actions, many based on the 21st Century Policing Task Force created in 2015 under President Barack Obama.

Highlights of the recommendations include the following:

  • Creation of a Deputy Inspector General within the Pennsylvania Office of State Inspector General (OSIG) focused on deterring, detecting, preventing, and eradicating fraud, waste, misconduct, and abuse amongst law enforcement agencies under the governor’s jurisdiction.
  • Creation of a Pennsylvania State Law Enforcement Advisory Commission that reviews allegations of misconduct by law enforcement personnel under the governor’s jurisdiction.
  • Providing technical assistance to municipalities from the Pennsylvania Commission on Crime and Delinquency (PCCD) to encourage the creation of local citizen advisory boards.
  • Creation of a Racial and Ethnic Disparities Subcommittee under the Criminal Justice Advisory Committee (CJAC) at PCCD.
  • Review of the training and education of officers. All training academies for law enforcement must review current use-of-force training standards for law enforcement and form a workgroup to develop model training standards to ensure that all officers receive the best instruction in their interactions with the public. Departments should be striving to obtain state and or national accreditation. Accreditation is a key component in assisting departments in evaluation and improvement of their standards and practices.
  • Enhancing officer safety and wellness. Enhancing current mental health initiatives and offering targeted mental health support for officers to deal with trauma and to reduce the stigma for getting help.
  • Supporting legislative reforms. The governor will work with the legislature on reforms, including legislation proposed that provides for improved access to police videos, an oversight board for officer training and continuing education, a special prosecutor in deadly force cases, interdepartmental law enforcement hiring reform, and post-traumatic stress disorder evaluation for police officers.

Earlier this week, members of the Police Reform Working Group, which includes state and local elected officials, the chief defender of the Defender Association of Philadelphia, as well as several attorneys, put forward proposals to address growing frustration with racism, oppression, and law enforcement misconduct.


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CPA-PAC 2019 Annual Report Available

Thanks to the generous contributions of PICPA members and firms, the CPA-PAC raised more than $230,000 in total contributions last year. Notably, combined contributions from individuals and medium-size firms rose by about $10,000 from 2018, and more than 200 members joined the cause who had not given in the year prior. These funds supported 119 elected officials on both sides of the aisle and helped to facilitate two major legislative accomplishments: Act 90 of 2019, a commonsense measure that establishes a 10-year window for the DOR to collect taxes, and Act 13 of 2019, omnibus legislation that includes a much-needed amendment to estate and inheritance taxes. Support of the CPA-PAC is truly invaluable and helps ensure that CPAs have a powerful and unified voice in Harrisburg through 2020 and beyond.

Be sure to view the 2019 Annual Report and consider making a contribution for 2020. Contributions of any amount are greatly appreciated, but there are four established levels of giving:

For Individuals: For Firms (Revised for the 2020 Year):
Keystone Club: $500 and above Diamond: $15,000 and above
(New for 2020)
President's Club: $250-$499 Platinum: $7,500-$14,999
Century Club: $100-$249 Gold: $2,500-$7,499
CPA-PAC Member: $60-$99 Silver: $1,000-$2,499
  Bronze: $100-$999



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State Lawmakers Return to Harrisburg

State House and Senate lawmakers returned on June 8 following the primary election recess. With a budget in place for the new fiscal year that begins on July 1 and the rush to pass COVID-19-related bills having subsided, lawmakers can now focus on other legislation.

PICPA is closely watching House Bill 2497, sponsored by Rep. George Dunbar (R-Westmoreland). The legislation clarifies that loans forgiven under the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is not subject to state taxation. A final vote in the House could happen this week.

The House Gaming Oversight Committee convenes on June 8 for an informational meeting regarding the reopening plan of casinos.

On June 9, the House Human Services Committee has a voting meeting to consider, among other bills, House Bill 2352, sponsored by Rep. Seth Grove (R-York). The bill will create a state False Claims Act. The bill is modeled after federal law. The Pennsylvania Coalition for Civil Justice Reform (PCCJR), of which PICPA is a member, opposes to the legislation.

Check out the full list of committee meetings and hearings.


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State Spending Plan Sustains Education, Supports Communities Amid Pandemic

Gov. Tom Wolf signed into law on May 29 a fiscal year 2020-2021 state budget. The plan provides 12 months of sustained public education funding at 2019-2020 levels and makes important investments in communities and programs to help begin to restore the economy.

The $25.75 billion General Fund budget in House Bill 2387 includes an additional $2.6 billion in federal funding provided through the CARES Act. The budget sustains funding at current year levels for Pre-K Counts and Head Start, basic and special education in K-12 schools, and higher education. The budget also provides $300 million from the CARES Act to make up for a decline in gaming revenue that annually supports school property tax relief for homeowners.

A new $150 million grant program will help school districts reopen safely in the fall by supporting training, equipment purchases, and services to minimize the risk of infection. Some of the eligible uses for the grants will include health monitoring equipment, sanitation, personal protective equipment, educational technology for distance learning, and other health and safety programs.

The Pennsylvania Higher Education Assistance Agency will receive more than $42 million, including $30 million for state grants. An additional $30 million will support the Pennsylvania State System of Higher Education with costs incurred during the COVID-19 pandemic.

To help communities recover, the budget provides $420 million to assist nursing homes with COVID-19-related costs, $50 million to help Pennsylvanians with food insecurity, and $225 million for grants to small businesses through the Department of Community and Economic Development.

The budget also provides $625 million to counties through block grants to help address the disruption to their budgets from the pandemic. The funding will assist counties with the cost of purchasing personal protective equipment, help local governments, and provide grants to small businesses, among other options.

Peter Calcara, PICPA vice president - government relations, will host a 50-minute Legislative Update webinar on the new spending plan at 9:00 a.m. on June 18. Sign up today.

The governor also signed House Bill 1083, House Bills 2441 – 2445, House Bills 2467 – 2475, House Bill 2510, and Senate Bills 166, 1108, and 1122. The governor vetoed Senate Bill 1027 and House Concurrent Regulatory Review Resolution 1


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May Revenue Collections Fall Short

Pennsylvania collected $2.1 billion in General Fund revenue in May, which was $439.7 million, or 17.3%, less than anticipated. Fiscal year-to-date General Fund collections total $29.6 billion, which is $2.6 billion, or 8.2%, below estimate.

About $199.8 million of the $439.7 million shortfall in May can be attributed to moving due dates for various taxes. The remaining $239.9 million of the May shortfall is due to reduced economic activity during the COVID-19 pandemic.

View the Independent Fiscal Office’s (IFO) May Monthly Revenue Update.

Sales tax receipts totaled $699.1 million for May, $282.9 million below estimate. Year-to-date sales tax collections total $9.8 billion, which is $576.1 million, or 5.5%, less than anticipated.

Personal income tax (PIT) revenue in May was $947.2 million, $44.8 million above estimate. This brings year-to-date PIT collections to $11.8 billion, which is $1.5 billion, or 11.2%, below estimate.

May corporation tax revenue of $145.6 million was $164.7 million below estimate. Year-to-date corporation tax collections total $4.4 billion, which is $560.9 million, or 11.2%, below estimate.

Inheritance tax revenue for the month was $69.1 million, $26 million below estimate, bringing the year-to-date total to $1 billion, which is $3.7 million, or 0.4%, above estimate.

Realty transfer tax revenue was $33 million for May, $18.1 million below estimate. This brings the fiscal-year total to $464.7 million, which is $31.5 million, or 6.4%, less than anticipated.

Other General Fund tax revenue, including cigarette, malt beverage, liquor, and gaming taxes, totaled $159.6 million for the month, $20.1 million below estimate. The year-to-date total is $1.4 billion, which is $55.3 million, or 3.8%, below estimate.

Nontax revenue totaled $51.9 million for the month, $27.2 million above estimate. This brings the year-to-date total to $629.5 million, which is $69.8 million, or 12.5%, above estimate.

In addition to General Fund collections, the Motor License Fund received $220.9 million for the month, $59.4 million below estimate. Fiscal year-to-date collections for the fund – which include gas and diesel taxes, as well as other license, fine, and fee revenues – total $2.4 billion, which is $180.3 million, or 6.9%, below estimate.


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Preliminary Guidance for Students to Return to School Released

The Pennsylvania Department of Education announced new guidelines for elementary, secondary, and post-secondary schools to reopen in the near future. K-12 schools can begin reopening as early as July, and colleges, trade schools, and other post-secondary schools can begin offering classes again as soon as June 5.

Schools will be required to develop health and safety plans that reflect the unique needs of local districts, including steps to protect students and staff at higher risk of severe illness, training for staff and faculty, monitoring students and staff for symptoms, developing policies and hygiene practices to protect against infection, and ensuring proper distancing of desks and seating. Elementary and secondary schools in the state’s yellow and green phases may resume in-person instruction and activities beginning July 1 under a phased reopening approach that first requires schools to develop health and safety plans based on guidelines from the Centers for Disease Control and Prevention (CDC) and the state Department of Health (DOH).

Postsecondary schools in the yellow and green phases can resume in-person instruction effective June 5 following the development of a health and safety plan. The guidance applies to colleges, universities, seminaries, trade schools, and adult basic education programs. Institutions must adhere to proper physical distancing guidelines and other general public health and safety considerations informed by guidelines released by the CDC and DOH.

The plans must be approved by local boards of directors and posted on the school or district public website before a school reopens. The plans must also be submitted to Pennsylvania Department of Education.


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