Governor Outlines Priorities for Fall Legislative Session
With state House members preparing to return to session the week of Aug. 31 and the Senate returning later in September, Gov. Tom Wolf presented his fall legislative agenda for worker and family support and protections, COVID-19 recovery, and government reform. Wolf also urged lawmakers to quickly pass his election reform plan.
A centerpiece of Wolf’s agenda is help for Pennsylvania’s small businesses. Wolf proposes $225 million in forgivable loans and grants to small businesses through the COVID-19 Relief Statewide Small Business Assistance Program. In addition, the governor is proposing $100 million in forgivable loans and grants for the hospitality, leisure, and service industries, including restaurants and bars, salons, and barber shops. This funding will provide critical working capital financing to the state’s small businesses adversely affected by the COVID-19 pandemic.
The governor also is calling on the legislature to legalize recreational marijuana and have the proceeds fund existing small-business grants. Fifty percent of the funding would be earmarked for historically disadvantaged businesses. Along with the call to the General Assembly to pass legislation legalizing the sale and use of recreational marijuana, Wolf proposes that a portion of the revenue be used for programs that prioritize repairing the harm done to crime victims and communities as a result of marijuana criminalization.
For frontline workers, Wolf is looking for $225 million to increase hazard pay to Pennsylvania workers, using the overall structure of the current PA Hazard Pay Grant Program administered through the Department of Community and Economic Development. This funding would cover a $3.00 per hour increase for 208,000 frontline workers. The governor is proposing $10 million for a PPE reimbursement program for employers to cover the cost of masks, face shields, cleaning supplies, hand sanitizers, soaps, and other industry-specific PPE in accordance with Department of Health, Occupational Safety, and Health Administration (OSHA) and Centers for Disease Control and Prevention (CDC) recommendations.
In addition, Wolf announced a new paid parental leave proposal, which will offer six weeks of paid leave to commonwealth employees who have been employed for a year or more. This leave will be separate and apart from any accrued sick or paid time off that the employee may have earned. The governor also called on the legislature to pass paid family and sick leave.
Get more information on Wolf’s fall agenda here.
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PICPA Provides Testimony to GASB
Volunteer-led committees are at the core of most membership organizations, and the PICPA is no exception. Having an engaged and vibrant network of committees gives the organization a strong voice in public policy matters. These committees and their volunteers provide technical expertise and strategic leadership.
On July 28, PICPA member Pamela Baker, CPA, CGFM, provided testimony to the Governmental Accounting Standards Board (GASB) on an exposure draft on communication methods in external financial reports. Baker, who is managing partner at Barbacane, Thornton & Company, was representing PICPA’s Committee on Government Accounting and Auditing, which had submitted a comment letter in response to GASB’s Project No. 3-34, Communication Methods in General Purpose External Financial Reports.
Watch Baker’s testimony in the July 28 “Conceptual Framework—Disclosure Framework Public Hearing" recording (her testimony begins around the 4:32:45 mark).
Find a listing of PICPA’s recent comment letters here.
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COVID-19 Small-Business Tax Relief Legislation Introduced
State Sens. Camera Bartolotta (R-Washington) and Judy Ward (R-Blair) introduced legislation to update state tax laws to provide critical assistance to small businesses impacted by the COVID-19 pandemic.
Senate Bill 1278 would allow small businesses to take a net loss against other sources of income. Additionally, the measure would allow small businesses to take net operating losses (NOLs) against future years for up to 20 years. Large corporations can already claim NOLs under current law. The legislation would give small-business owners the option to benefit from the same tax strategies as their larger competitors.
The legislation would also allow small businesses to carry back losses to previous tax years. Under the bill, businesses that suffered NOLs in 2018 or 2019 could apply for a tentative tax refund if they were profitable in any of the five years prior to the loss. The legislation is modeled after the federal CARES Act, which temporarily reintroduced NOL carrybacks at the federal level.
Senate Bill 1278 is pending in the Senate Finance Committee. The PICPA Committee on State Taxation is reviewing the legislation.
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Measures in the Works to Help Restaurants
Restaurants are taking a big hit due to restrictions put in place to reduce the impact of the ongoing COVID-19 pandemic. There have been several legislative measures circulating to help ease this burden.
As part of her Coronavirus Relief Package, Sen. Lisa Boscola (D-Northampton) introduced Senate Bill 1249 that would provide for a six-month period of sales tax amnesty for restaurants, bars, and hotels.
Rep. Pat Stephano (R-Fayette) plans to introduce a package of bills that offer relief to Pennsylvania restaurants and taverns. The bill package will remove the 25% occupancy limit, remove the food requirement and ban on bar service, expand outdoor dining to noncontiguous areas, and waive all license renewal and permit fees paid by restaurants and taverns for one year from the date of implementation.
Sens. Pam Iovino (D-Allegheny) and James Brewster (D-Allegheny) plan on introducing a package of bills to provide direct and significant financial relief to restaurants, taverns, and clubs. This legislative package will include both short- and long-term aid totaling more than $175 million.
Reps. Joe Ciresi (D-Montgomery) and Tina Davis (D-Bucks) introduced House Bill 2791, which would provide grants to eligible bars, restaurants, catering, and banquet halls that are struggling. This bill will focus on smaller, community businesses – “mom and pop” establishments, rather than chains and national conglomerates. The bill plans to use CARES Act funding and place a cap on assistance to help as many local businesses as possible.
Rep. Jake Wheatley (D-Allegheny) plans to introduce legislation to ease the burden for liquor licensees by eliminating fees and penalties for delayed sales tax payments and allowing businesses a grace period for paying the 6% sales tax on liquor. Under this proposal licensees would no longer be subject to additional fees and penalties because of late payments of sales tax during the COVID-19 emergency declaration.
Rep. Kurt Masser (R-Northumberland) introduced House Bills 2752 and 2753. House Bill 2752 states that as long as sales tax is paid within 30 days following being due, the late fees and penalties will be waived. House Bill 2753 states that as long as the sales tax is paid by Dec. 31, 2020, the late fees and penalties will be waived.
All proposals are either awaiting formal introduction or pending in the state legislature.
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Senate Leaders Introduce Election Reform Legislation
Senate President Pro Tempore Joe Scarnati (R-Jefferson) and Senate Majority Leader Jake Corman (R-Centre) introduced legislation that, according to Scarnati and Corman, expand voter access, implement greater efficiencies within Pennsylvania’s voting process, and maintain election security. The measure expands upon the election reforms passed by the General Assembly and signed into law last fall, and contains recommendations made by the Pennsylvania Department of State in its 2020 Primary Election Act 35 of 2020 Report.
Senate Bill 10 would require counties to contact a voter to affirm their ballot if their signature on file and the ballot signature do not match, allow counties to open mail-in and absentee ballots up to three days prior to the election and to begin precanvassing at 8 a.m. the Saturday prior to an election. In addition, the bill would expand the region in which poll watchers may serve – from county residency to statewide – and change the date counties start sending mail-in and absentee ballots to voters from 14 to 28 days ahead of the election. Lastly, the legislation would move the application deadline to request a ballot to 15 days prior to an election, which is the same deadline as voter registration. (This change does not affect emergency absentee ballots.)
Senate Bill 10 was introduced on Aug. 24, 2020, and was referred to the Senate State Government Committee. The Senate is not currently scheduled to return to session until Sept. 8, but may return sooner.
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Lawmaker Introduces Property Tax Relief Measures for Seniors
Sen. Mario Scavello (R-Monroe) introduced legislation that would provide much needed school property tax relief for senior citizens in Pennsylvania.
Senate Bills 1262 and 1263 would provide for a property tax rebate of up to $5,000 for all seniors age 65 and older who have an annual household income of less than $60,000. (50% of Social Security benefits are excluded when determining income.) The legislation would eliminate property taxes for the majority of seniors.
The bills have been referred to the Senate Finance Committee for further study.
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IFO State Revenue Estimates Report
The Independent Fiscal Office (IFO) provides monthly estimates for General Fund revenues and quarterly estimates for Motor License and Lottery Fund revenues for fiscal year (FY) 2020-2021. The August 2020 Official Monthly and Quarterly Revenue Estimates report was just released.
The monthly and quarterly estimates are based on the FY 2020-2021 projections contained in the Official Revenue Estimate, published by the IFO on June 22, 2020, which includes adjustments to reflect the impact of statutory changes that were enacted in conjunction with the state budget. The report also includes a summary of recent statutory changes.
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Treasury Launches First-Ever Fiscal Health Scorecard
Pennsylvania Treasurer Joe Torsella announced the launch of the Fiscal Health Scorecard, an online tool designed to allow Pennsylvanians to better understand the long-term drivers of the commonwealth’s financial well-being.
The Fiscal Health Scorecard is a new feature of the state’s Transparency Portal that presents data on a user-friendly interface. The Scorecard looks at 13 criteria, including state credit ratings, pension funding status, population growth, unemployment rates, and Rainy Day Fund status. Users can see in-depth details, charts, and comparisons to see how Pennsylvania is faring nationally and in relation to similar states.
Torsella notes that the Fiscal Health Scorecard is a tool for constituents, legislators, and anyone with an interest in the fiscal health of Pennsylvania.
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