By Mike Manzo
The General Assembly finally wrapped up the 2020 legislative odyssey by sending Gov. Tom Wolf what is essentially an $11 billion supplemental budget, closing out the 2020/2021 fiscal year. And with that, everyone who works in and around state government got their first real break since the pandemic started. But before anyone gets too comfortable or allows sugarplums to start dancing around in their heads, 2021 is less than a month away. Before we know it, the new legislature will be sworn in and Governor Wolf will start his final two years in office. What will the upcoming session look like? Here is our best guess.
Right out of the gate, the House and Senate will be asked to once again wrestle a comprehensive transportation funding package to the ground. PennDOT has already started to shift over $3 billion in funding from local roads to interstate highways, and 2022 will bring with it the end of the Turnpike’s annual $400 million contribution to public transportation. And late in this most recent budget debate, PennDOT asked the legislature for $600 million in bonding authority, which it did not get. As omens go, this was a bad one, even though the administration did work out temporary deal to keep projects moving into the spring.
We could go on and on as to how we got here, but we will let our good friend Bob Latham bring you up to speed.
One thing we know having been through several of these legislative battles is that there are no easy options. When the problem is measured in billions, half-steps and tinkering around the edges won’t work. Transportation funding will be a true test of all the incoming legislative leaders and will require a lot of muscle from the governor to bring it home.
Alternative Energy Standards
The original Alternative Energy Portfolio Standards required that, by 2021, 8% of the state’s electricity come from Tier One energy sources (small scale hydro, geothermal, solar, coal methane, etc.) and 10% from Tier Two sources (existing waste coal, distributed generation, demand-side management, large-scale hydro, municipal solid waste, wood pulping and manufacturing byproducts, and integrated gasification combined cycle coal facilities).
Well, 2021 is essentially here, and the General Assembly will likely be revisiting these target goals. On one side you will have progressives arguing for larger renewable source carve-outs. On the other side, there will be increased pressure to use the shale gas we already have and expand the delivery system (new pipelines). Oh, and over there in the corner will be the nuclear power plants, who will be quick to remind all of us that they produce carbon-free power. Threading the needle on this one will require making a lot of people on the far ends of each caucus angry. And as a bonus, this debate will likely also feature a heavy dose of advocacy by the state’s building trades, putting a lot of “pro-trades” members in very uncomfortable spots.
Even though the General Assembly tackled comprehensive electoral reform this fall, the controversy surrounding pre-canvassing and mail-in ballots all but assures they will need to take another crack at it. There is little chance that Pennsylvanians will ever return to in-person only voting (with a smattering of absentees) even post-pandemic. Once you make it easier for people to vote, it isn’t really possible to turn around and make it harder. The challenge for each party will be to come to an agreement while the worst-case scenario for Democrats looms out there: a constitutional amendment to divide the state into judicial districts for appellate judges. For the uninformed, the GOP holds majorities in both chambers and constitutional questions do not require gubernatorial signatures, effectively sidelining the Democrats’ last line of defense. If it passes, it will be up to the voters to decide. Expect early fireworks on this one.
Regional Greenhouse Gas Initiative
Also known at RGGI (Reggie, if you’re a cool kid), Governor Wolf opted into this regional compact to cut down on emissions last year. Despite several legislative attempts to undo his work, all that is really left for the legislature and the governor is to negotiate what to do with the estimated $300-400 million the state will receive annually for carbon purchases by generators. Wolf wants to securitize those dollars for up to $6 billion for his RestorePA plan to fund a little bit of everything under the sun, but so far, no GOP leaders have publicly engaged. Expect that to change this spring when time begins to run down on how to allocate those funds and members realize they might be able to fund rural broadband efforts with the cash. The RGGI debate might even get wrapped around the budget debate, or the transportation funding debate.
Budget Debate (Son of CARES Act)
And how can we forget the upcoming state budget debate that the governor will kick off in February?
With the state projecting a hole of more than $4 billion, all eyes are focused on Washington, where everyone is hoping for a second stimulus package out of Congress that might help fill that unprecedented gap. The good news for the state is that Senate Majority Leader Mitch McConnell has softened his stance that no money be sent to state and local governments to fill budget shortfalls, but the bad news for Democrats is that he seems to have a price: comprehensive liability protections for businesses affected by COVID. The dance that Speaker Nancy Pelosi will have to do to sell this one to her caucus will be one for the ages.
Without new federal money, the debate over next year’s budget will be extremely contentious and could last well into the summer. On one hand, it may force the governor (and his party) to talk about new taxes, which will thrill the GOP majorities to no end. On the other hand, if the discussion becomes more about securitizing existing state revenue streams (read: borrowing), it will not be an easy sell to the more conservative members of the GOP, who already loathe borrowing.
Now that the Community Health Choices plan has been implemented statewide, the General Assembly is likely poised to kick the tires on it and see what needs to be fine-tuned. First up is likely to be nursing home care and other providers who have seen their reimbursement rates flatline under the managed care model. Moving from fee-for-service to managed care has been a somewhat bumpy ride for a lot of folks, so much so that it is sometimes referred to as “the solution that wasn’t.”
With a Biden presidency and Nancy Pelosi still steering the ship in the U.S. House, the repeal/replace/retract/reboot of Obamacare is dead for the foreseeable future, which should provide some level of stability for insurers in PA. However, the devastating impacts of COVID-19, the rollout of vaccines and the skyrocketing number of new Medicaid-eligible Pennsylvanians will have a serious impact on the budget over at DHS. And if we know anything, there are some lawmakers (chiefly residing in the PA House GOP) who already believe we spend too much over at DHS. Expect some real fireworks when their budget request hits to Appropriations Committee.
Business Liability Limits for COVID-19
This one popped onto the state radar screen late in the last session, as the General Assembly passed (and Wolf vetoed) a bill that would have provided broad immunity from lawsuits to businesses, schools and health care providers. Wolf contends that rewarding non-compliance with COVID restrictions and guidelines should not be rewarded with immunity from lawsuits, while the GOP doesn’t want to see innocent business owners hit with a few million lawsuits between now and the end of the pandemic. Republican leaders have already signaled they will try again early next year, so maybe it is time for the new Bipartisan Caucus co-chairs Rep. Greg Rothman and Rep. Stephen Kinsey to find a way forward?
A Word About the Rest
Access to high-speed internet/broadband – The Wolf administration and the House and Senate GOP actually share the same goals here, since the lack of access is most acute in rural Pennsylvania (i.e., places represented by Republicans). Once everyone realizes that the solution costs real money, then everyone can get down to real business. Until everyone crosses that bridge, everything else is half-steps or window dressing.
Criminal Justice Reform – Expect more solid work on this front, considering this is a place where Dems and the GOP seem to play well in the sandbox.
Gaming – Will the General Assembly finally figure out how to balance the books without more gaming revenue?
Recreational marijuana – Despite widespread public support for legal weed, expect some rough sledding here. While the promise of fast revenue could be enticing, there remains significant roadblocks in the GOP-held House in particular.
Workforce development/economic development – Everyone wants to see the Pennsylvania economy back on its feet once COVID is finally in the rearview mirror. Expect healthy cooperation here.
Liquor Reform and Privatization – It is on the list because it never dies.
Property Tax Reform—See: Liquor Privatization.
All in all, the 2021/2022 legislative plate looks to be full even before it begins. New issues will undoubtedly pop up, and with new legislative leaders scattered about the four caucuses, there are new players in the game. So, enjoy the holidays and don’t blink. January will be here before you know it, and it is safe to say that we all look forward to saying goodbye to 2020.