Senate Committee Approves PICPA Initiatives
The Senate State Government Committee unanimously approved two PICPA legislative initiatives that will save nonprofit organizations unnecessary fines and penalties and provide a clear standard for filing registration statements that are aligned with other state filing requirements. Sponsored by Rep. Keith Greiner (R-Lancaster), CPA and PICPA member, the measures amend the Solicitation of Funds for Charitable Purposes (SFCP) Act.
House Bill 1420 sets new auditing thresholds of financial statements under the SFCP Act for charitable organizations that receive annual contributions. The levels were last increased in 2006. House Bill 1421 makes technical changes that will assist organizations filing a registration statement with the Department of State’s Bureau of Corporations and Charitable Organizations (BCCO). The legislation will clarify that any registration postmarked on or before the renewal date will be considered timely filed and will not accrue late fees. Additionally, the bill provides a uniform 15-day review period by the BCCO.
Both HB 1420 and HB 1421 are pending before the full Senate.
The PICPA urges members to contact their state senators and ask them to support both House Bill 1420 and House Bill 1421. You can write an e-mail and cite the related PICPA Issue Brief. (To e-mail, click on your senator in the directory and then click on the envelope icon in the upper left corner.)
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Senate Rejects House-Passed Revenue Package
Returning to session following the summer recess, the Pennsylvania Senate rejected the House-passed revenue package by a vote of 43-7. The budget stalemate is now more than 80 days.
The House plan, which is found in House Bill 453, would raise $2.4 billion through a combination of fund transfers, gaming expansion, and the monetization of a portion of the revenues from the Master Tobacco Settlement Fund. The revenues would fund the $1.5 billion deficit from 2016-2017 as well as the anticipated $600 million in revenue necessary for the current $32 billion state budget.
“Where we're at financially is not good,” Senate President Pro Tempore Joseph Scarnati (R-Jefferson) told reporters after the Senate vote. “We're out of money, and we've never been in this position before, being out of money.”
Last Friday, the Wolf administration announced that it would delay $1.7 billion in payments to Medicaid providers and school districts.
The House returns to session on Sept. 25. The Senate is in recess until the call of the President Pro Tempore.
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S&P Downgrades Pa.’s Credit Rating, Legislative Leaders Respond
Citing the ongoing budget impasse and the decade-long struggle to eliminate the state’s $2.2 billion structural budget deficit, Standard and Poor's (S&P) downgraded Pennsylvania’s credit rating on Sept. 20.
“While it is not uncommon for states to have periodic structural imbalance, Pennsylvania’s chronic misalignment and eroding general fund position, particularly during a period of economic growth, demonstrate a pattern of financial mismanagement," S&P said in a statement.
The previous S&P credit rating was AA-; the downgrade brought the state rating to A+.
Pennsylvania, Connecticut, and Kentucky share the same rating. Only Illinois and New Jersey have a lower rating.
Said Gov. Tom Wolf: “For months, I have warned that a credit downgrade was looming. I have said repeatedly for three years that we must responsibly fund the budget with recurring revenues. We must reach an immediate resolution to the budget and today's news should be a wake-up call to come together and end this now.”
Wolf urged legislative leaders to come to an agreement on a revenue plan before Oct. 1 to avoid further delays in payments.
Legislative leaders in both the House and Senate were quick to respond to the news of the credit rating downgrade.
Senate Republican leaders said, “Resolving the state’s fiscal issues through compromise must happen immediately. In reaching a final resolution, the budget must be balanced for this year and next. We need to plan responsibly today for a better tomorrow, understanding the far-reaching importance of the tough decisions that we have to make now.”
Senate Democratic leaders noted in a statement that “All parties need to return to the bargaining table and work through details of a plan that will sustain our budgetary needs.”
The House Republican leadership team issued the following statement: “It is very disappointing Commonwealth budget costs will increase thanks to a small group of unknown people at Standard & Poor’s who make decisions based on interviews with a governor and press releases from the state’s fiscal officers. Understanding this downgrade is not good news, our members believe we should use it as a wake-up call to deal with major budgetary cost-drivers facing our government.”
House Democratic leaders noted, “It didn’t have to be this way. It shouldn’t be this way. Today’s news is a blow to our state’s fiscal standing. It’s also an opportunity for everyone, including the House Republicans, to take stock of the situation and get back to work on a real budget solution that includes recurring revenue.”
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Corr Bill Aims to Crack Down on Welfare Fraud
Taxpayer money is finding its way into the hands of dead people, and that needs to stop. That’s the sentiment behind a bill introduced by state Rep. Michael Corr (R-Montgomery), CPA and PICPA member.
“The Commonwealth has a $2.1 billion budget deficit and it’s handing out welfare money to dead people,” Corr said. “This is a pretty obvious case of fraud and wasting taxpayer dollars. If we can prevent this fraud, we can put a small dent in the state budget deficit and also use that money to help people in need.”
About one year ago, Pennsylvania Auditor General Eugene DePasquale announced that an audit performed by his office found the Department of Human Services (DHS) provided nearly $700,000 in welfare benefits to more than 2,300 individuals who had been dead for at least 60 days.
House Bill 1614 would require DHS to regularly cross-reference its list of welfare recipients with death records maintained by the Pennsylvania Department of Health (DOH) and the Social Security Administration.
The bill is currently under consideration in the House Health Committee.
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Senate Committee Hears Testimony on Illegal VGTs
Members of the Senate Law and Justice Committee recently heard from the state police and officials from the state Liquor Control Board about enforcement of gambling control laws.
Major Scott Miller, director of the State Police Bureau of Liquor Control Enforcement, told senators that Pennsylvania’s liquor licensees have an estimated 13,500 illegal electronic gambling machines – known as video gaming terminals (VGTs) – that generate some $350 million in income annually. Miller told senators that the state seizes an average of 650 machines per year.
The state House has approved legislation to legalize VGTs in Pennsylvania. House Bill 271 would legalize VGTs in bars, taverns, clubs, and at truck stops. The bill is now pending in the Senate Law and Justice Committee, where it has been met with strong opposition.
Both the House and Senate have included gaming expansion in budget revenue plans.
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Hearing Explores Job Creation, Government Overregulation
State House members participated in a roundtable discussion this week in Bethlehem to hear testimony from local job creators who say they have been impeded by Pennsylvania’s state agencies, complex regulations, and cumbersome processes.
Susan Jarvis, CPA and PICPA member, was among those who testified. Others included Lorraine Faccenda, LaFarage Cement; Bonnie Butz, Vaping Oasis; Don Cunningham, Lehigh Valley Economic Development Corp.; James Fischer, Small Business Development Center of Lehigh University College of Business & Economics; and Chad Paul, Ben Franklin Technology Partners.
Led by Rep. Kerry Benninghoff (R-Centre/Mifflin), chair of the House Majority Policy Committee, and Rep. Marcia Hahn (R-Bushkill Township), the hearing is part of the Policy Committee’s initiative to grow and strengthen Pennsylvania’s middle class. Over the course of several hearings and roundtable discussions this fall, the committee will hear from Pennsylvania residents, community leaders, and businesses on how state government can best assist them.
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Speaker Announces Special Election for State House Seat
Speaker of the House Mike Turzai (R-Allegheny) ordered a special election to be held Tuesday, Dec. 5, to fill the vacant seat in the 133rd Legislative District in Lehigh County.
The vacancy was created by the Sept. 8 death of Rep. Daniel McNeill (D-Lehigh).
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 certified.
The district office will remain open under supervision of the House to assist constituents with issues or problems, and continue constituent inquiries already in progress. The office will remain until a new representative takes office and decides how to manage the district.
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