Week Ending Jan. 15, 2021

Jan 15, 2021

State House Lawmakers Return for First Week of New Session

State House lawmakers returned for the first full week of the 2021-2022 session, while the Senate returned for a few hours on Wednesday for the purpose of swearing in Sen. James Brewster (D-Allegheny). Senate Republicans delayed Brewster’s swearing in last week pending the results of a federal lawsuit. U.S. District Judge J. Nicholas Ranjan’s decision on Jan. 12 came down in Brewster’s favor.

Senate Republicans this week announced chairs for the 22 Senate standing committees for the 2021-2022 Session. Sen. Scott Hutchinson (R-Venago) returns as majority chair of the Senate Finance Committee. Senate Democrats have yet to announce their chairs.  

State House lawmakers spent the week adopting rules and setting up operating procedures for that chamber’s 28 standing committees. Rep. Mike Peifer (R-Pike) returns as chair of the House Finance Committee. He has a new Democratic counterpart as Rep. Kevin Boyle (D-Philadelphia) replaces Rep. Jake Wheatley (D-Allegheny), who moves over to serve as Democratic chair of the House Professional Licensure Committee. Last session, Boyle served as Democratic chair of the House State Government Committee.

CPAs are well represented on the Finance Committee. Four current or inactive CPAs include Chair Peifer, Rep. George Dunbar (R-Westmoreland), Rep. Keith Greiner, CPA (R-Lancaster), and Rep. Frank Ryan, CPA (R-Lebanon).   

The House State Government Committee approved a series of bills during its first meeting:

  • House Bill 51: Amends the Pennsylvania Constitution related to taxation and finance, providing for restrictions on budgetary surpluses.
  • House Bill 52: Amends Title 72 (Taxation and Fiscal Affairs) to establish the State Council on Finance.
  • House Bill 55: Proposes separate and distinct amendments to the Pennsylvania Constitution relating to emergency disaster declarations, nondiscrimination protections, and presentment to the governor. A similar version of House Bill 55 was approved last session.
  • House Bill 71: Amends the Pennsylvania Constitution to establish limits on the spending of Commonwealth funds.
  • House Bill 104: Amends Title 71 (State Government) to add a new chapter relating to the assessment and reduction of improper payments.
  • House Bill 108: Allows participation in the “Do Not Pay” initiative for agencies managing funds disbursed from the U.S. Treasury.

House and Senate lawmakers are scheduled to return to session the week of Jan. 25.


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PICPA to Serve on Task Force to Address Financial Exploitation of Older Adults

The Pennsylvania Department of Aging (PDA) has convened a task force of state agencies; aging, legal, financial, law enforcement, and health care stakeholders; and subject matter experts to discuss financial exploitation of the elderly and to focus on a multidisciplinary approach to its prevention. The PICPA is a member of the task force.

The formation of a task force was one of the five recommendations of PDA’s Financial Exploitation Study, released in September 2020. The task force is scheduled to meet through April 2021, with the goal of better coordinating efforts and supports for the early detection and prevention of financial exploitation.

“Financial exploitation causes significant harm to older adults and we know it is significantly underreported,” said Secretary of Aging Robert Torres, who chairs the task force. “The department felt it was imperative to bring together stakeholders who work closely with older adults and discuss how financial exploitation occurs and ways to prevent and stop it.”

The study reported that the average victim was female, around 79-years-old, widowed, and living alone, with an income above the federal poverty guidelines. The average financial loss to each victim in the study was almost $40,000, totaling close to $12.5 million in the cases included in the study alone. In fact, though, few cases are ever reported. As a result, estimated losses, including unreported cases, for fiscal year 2017-2018 could have been as high as $2.5 billion.


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Local Tax, myPATH Webinars Open for Registration

The PICPA is offering two webinars that might be of interest to members.

On Jan. 21, Life, Liberty, and the Pursuit of Pennsylvania Local Taxes will unwind Pennsylvania’s uniquely complex local earned income tax law and its intricacies. The session is hosted by PICPA local tax experts David Caplan, CPA, Cheri Freeh, CPA, and James Newhard, CPA.

On Jan. 22, Karen Clark, CORE analyst at the Pennsylvania Department of Revenue Customer Experience Center, will provide an overview of the myPath interface in this webinar. This new portal replaces the personal income tax e-Services portal as well as PAdirectfile. In this 100-minute session, you will find out how myPATH provides many self-service options, such as the ability to register an account, file returns, pay balances, submit correspondence to the DOR, review correspondence received from the DOR, and manage an account online.


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House Republicans Prioritizing Economic Recovery Policy in New Session

Pennsylvania House Majority Leader Kerry Benninghoff (R-Centre) announced the formation of a task force that will examine and develop economic recovery policy for the current legislative session.

“As we began this session, I made it a priority to develop a working group of lawmakers from across Pennsylvania with varied backgrounds to put their heads together to help inform my office about what economic recovery legislation should look like,” Benninghoff said.

The Economic Recovery Task Force will work to align home-grown assets with opportunities for economic growth. The task force is made up of members from different areas of the state and varied backgrounds to help bring different perspectives to the development of policy to help kick-start the economy.


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Rep. Fiedler to Lead Progressive Policies Group

State Rep. Elizabeth Fiedler (D-Philadelphia) has been named chair of the House Democratic Policy Committee’s Subcommittee on Progressive Policies for Working People. The subcommittee will focus on five major areas: health care, tax reform, environmental policy, criminal justice, and housing.

“I am proud to chair this subcommittee and lay out a policy agenda that focuses on valuing the lives of working and poor people over big corporate profit,” Fiedler said.

Fiedler noted that the subcommittee’s charge is “to ensure an equitable system that does not force poor people to pay more while providing loopholes to the wealthiest to pay less. We deserve fully funded public schools; substantial and effective infrastructure for public utilities, including mass transit, roads and bridges, and broadband internet access; a robust health care system; quality affordable housing; and sustainable environmental practices to preserve our communities.”

The subcommittee will begin policy hearings in the coming weeks. 


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December State Revenue Collections Report

Pennsylvania collected $3.7 billion in General Fund revenue in December, which was $465.8 million, or 14.5%, more than anticipated, according to the Department of Revenue. Fiscal year-to-date General Fund collections total $18.5 billion, which is $467.1 million, or 2.6%, above estimate.

According to the Independent Fiscal Office’s (IFO) December Revenue Update, which compares collections to the prior year, General Fund revenues for the month were $774.4 million (26.6%) above IFO’s projections. IFO says the overage was primarily due to stronger than expected corporate net income tax collections and one-time transfers under Act 114 of 2020 (not included in IFO’s official estimate).

Sales tax receipts totaled $1.0 billion for December, $54.4 million above estimate. Year-to-date sales tax collections total $6.4 billion, which is $54.4 million, or 0.9%, more than anticipated.

Personal income tax (PIT) revenue in December was $1.2 billion, $36.0 million above estimate. This brings year-to-date PIT collections to $7.4 billion, which is $36.0 million, or 0.5%, above estimate.

December corporation tax revenue of $771.3 million was $308.8 million above estimate. Year-to-date corporation tax collections total $2.2 billion, which is $310.4 million, or 16.6%, above estimate.

Inheritance tax revenue for the month was $104.8 million, $14.4 million above estimate. This brings the year-to-date total to $605.0 million, which is $14.3 million, or 2.4%, above estimate.

Nontax revenue totaled $375.6 million for the month, $15.4 million above estimate. The year-to-date total is $665.3 million, which is $15.3 million, or 2.4%, above estimate.


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Speaker Announces Special Election for the 59th District

Speaker of the House Bryan Cutler (R-Lancaster) ordered a special election to coincide with Pennsylvania’s primary election on Tuesday, May 18, to fill the vacant seat in the 59th Legislative District in Westmoreland and Somerset counties. The vacancy was created by the sudden passing of Rep. Mike Reese (R-Westmoreland/Somerset).

“Rep. Reese set an example for every legislator to follow, and he is greatly missed in the chamber by members and close friends on both sides of the aisle,” Cutler said. “His commitment to his family and his constituents could never be questioned, and he leaves enormous shoes to fill on our House Republican leadership team.”

Candidates for the office will be selected by a process designated by their respective political parties, and the winner of the special election will take office after the results are confirmed.

The district office will remain open, under supervision of the House, to assist constituents with issues or problems and to continue constituent inquiries already in progress. The office will remain open until a new representative takes office and decides how to manage the district.


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