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PA Capitol & COVID-19 Report: Up To $3.9 Billion State Revenue Hit, Fight Over Reopening Businesses Continues

Last week COVID-19-related deaths in Pennsylvania climbed to 507 and 22,833 people have tested positive for the virus as of Saturday.

Gov. Wolf said Friday, Pennsylvania could start seeing the beginning of a peak number cases in some areas of the state this coming week. Secretary of Health Dr. Rachel Levine cautioned not all areas of the state will see its peak at the same time.

Gov. Wolf took additional steps to address specific COVID-19 spread concerns last week by extending the shutdown of schools across the state for the remainder of the school year and issued an order to create a temporary reprieve program to release up to 1,800 non-violent inmates at or nearing the end of their release dates from state prisons who are the most vulnerable to getting the virus.

He also signed a new order allowing the PA Emergency Management Agency to reallocate personal protection equipment and other COVID-19 supplies between private sources of the supplies and hospitals to make sure the most pressing needs are addressed.

Gov. Wolf announced the PA Infrastructure Investment Authority voted to approve a low-interest, short-term loan program to provide up to $450 million in funding to hospitals to bridge the gap until federal assistance arrives. (PennVEST was originally established to provide funding for water and wastewater infrastructure improvements.)

In addition to the human toll, the economic impact of the virus is becoming clearer-- 1.3 million people have filed for unemployment in the last four weeks and the Independent Fiscal Office has projected up to a $3.9 billion hit to state revenues.

With the bad economic news getting worse, House and Senate Republicans stepped up their calls for allowing many businesses now closed to reopen, like construction and additional retail outlines, if they follow CDC guidelines, something the Wolf Administration opposes saying it’s premature.

Two concentrations of COVID-19 in businesses did grab headlines last week when a meat packing plant in Luzerne County reported 130 workers tested positive for the virus and suffered one death and another meat packing plant in Schuylkill County reported 164 cases of COVID-19.

In addition, two nuclear power plants undergoing refueling-- Limerick in Montgomery County and Susquehanna Station in Luzerne County-- both reported multiple cases of COVID-19 and they were following CDC guidance.

With respect to federal help to address the economic impact of COVID-19, some small businesses in the state are reporting they started to get emergency paycheck protection and other loans from the federal Small Business Administration last week to help support their operations during this difficult time.

Individuals are likely to start receiving their individual federal stimulus payments this coming week by direct deposit and the IRS will be posting an online tool to allow people to track their payment beginning April 17.

To help individuals receive their stimulus payments who do not file an income tax return, the IRS has created a special online tool to enter their information.

Unemployed workers will also be getting up to an extra $600 a week in federal unemployment payments in their assistance soon, with the Department of Labor and Industry reporting they issued the first enhanced payments Friday.

Gov. Wolf also said the state would not be ready to accept unemployment benefit applications from free-lancers and gig workers, like Uber or Lyft drivers and independent contractors, until April 24.

Here’s more detail on several of these issues--

Republicans Move Bills To Reopen Businesses

House Republicans last week moved two bills-- by party-line votes-- to reopen some businesses closed by Gov. Wolf shutdown order. Both bills are in position for a final vote when the House next returns to session.

House Bill 2376 (Roae-R-Crawford) would open all retail stores during COVID-19 emergency (sponsor summary). House Bill 2400 (Turzai-R-Allegheny) would reopen all private and public construction during COVID-19 emergency (sponsor summary).

The Wolf Administration has opposed these bills with the Secretary of Health Dr. Rachel Levine telling legislators-- first we have to save lives, then livelihoods.

House Republicans also amended and passed-- again by party-line votes-- Senate Bill 327 (Argall-R-Schuylkill) which would create a legislative-executive-judicial branch COVID-19 Cost And Recovery Task Force to identify urgent needs during the emergency that requires executive, legislative or judicial actions, develop a recovery plan and do a final report on the pandemic six months after the emergency is over (House Fiscal Note & Summary).

House Democrats said the task force makes no sense, ties the Governor’s hands and is imbalanced in terms of membership.

The bill is now in the Senate for action for when it is scheduled to return May 4.

Liquor Store Closures

Gov. Wolf acknowledged Friday the effort to open online sales of liquor and wine hasn’t worked well enough, but he did not back down on the issue of keeping the liquor stores closed to prevent the spread of COVID-19.

Since the stores closed March 17, shoppers still can buy wine and beer through many other outlets as a result of limited privatization.

But the brouhaha over the closed liquor stores is starting to create some conversation about real liquor privatization with House Speaker Mike Turzai (R-Allegheny) Tweeting if Gov. Wolf signed legislation to privatize the liquor system in 2015, instead of vetoing it, “we won’t be having this conversation.”

Of course, he forgot the COVID-19 risk would still be there even with private stores.

$2.7 To $3.9 Billion State Budget Impact

On April 8, the Independent Fiscal Office issued a special report projecting a $2.7 billion to $3.9 billion reduction in state revenues in the current and FY 2020-21 combined under two different scenarios of how long the COVID-19 shutdown will remain in effect-- a six-week closure ending April 27 and a 10-week closure ending May 25.

Both scenarios assume 1.1 million workers-- excluding self-employed that receive unemployment compensation-- are impacted by business closures increasing unemployment to 8.7 percent and employment contracts by 264,000 jobs. Read more here.

Senate/House: No Promises On Using Their $172 Million Surplus

Spotlight PA reported Senate and House leaders haven’t taken any steps to cut their spending or commit to using the $172 million operating surplus they have to fight COVID-19 or help address the state’s worsening budget deficit.

One political observer called the lack of action “tone deaf,” while the Executive Branch is cutting employees, freezing spending and moving monies allocated to other programs to help fight COVID-19.

Local Govt./School District/Notary Help

The Senate unanimously passed legislation-- Senate Bill 841 (Martin-R-Lancaster)-- with a variety of provisions to address concerns of local government, school districts and notaries, including--

-- Gives local governments the option of waiving fees and penalties for the late payment of property taxes if paid in full by the end of the year;

-- Extends deadlines for property tax discount rates until August 31;

-- Allows school districts to renegotiate contracts with service providers to help keep costs fixed and personnel employed while schools are closed;

-- Extends deadlines for participating businesses to make payments under the state Educational Improvement Tax Credit program;

-- Allows local governments, boards and authorities to conduct remote meetings and hearings; and

-- Allows notaries to do business remotely through electronic communications.

The bill is now in the House for a concurrence vote.

New House Members

The House last week swore in its three newest members-- Tim Bonner (R-Mercer), Eric Davanzo (R-Westmoreland) and KC Tomlinson (R-Bucks)-- all elected in special elections at the beginning of the COVID-19 pandemic.

The members also received their new committee assignment--

-- Rep. Davanzo was elected as a member of the Gaming Oversight, Game and Fisheries, Aging and Older Adult Services, and Human Services Committees.

-- Rep. Bonner was elected as a member of the Children and Youth, Commerce, Health, and Human Services Committees.

-- Rep. Tomlinson was elected as a member of the Children and Youth, Gaming Oversight, Professional Licensure, and Human Services Committees.

To make room for the new members, these House members were switched around to other committees--

-- Rep. Joshua Kail (R-Beaver) has resigned as a member of the House Gaming Oversight Committee.

-- Rep. David Rowe (R-Snyder) has resigned as a member of the House Game and Fisheries Committee.

-- Rep. Dawn Keefer (R-York) has resigned as a member of the House Aging and Older Adult Services Committee.

-- Rep. John Hershey (R-Juniata) has resigned as a member of the House Human Services Committee and the House Children and Youth Committee.

-- Rep. Lou Schmitt (R-Blair) has resigned as a member of the House Commerce Committee.

-- Rep. Natalie Mihalek (R-Allegheny) has resigned as a member of the House Children and Youth Committee and the House Gaming Oversight Committee.

-- Rep. Marcia Hahn (R-Northampton) has resigned as a member of the House Health Committee.

-- Rep. Lori Mizgorski (R-Allegheny) has resigned as a member of the House Human Services Committee.

-- Rep. Stephen Barrar (R-Delaware) has resigned as a member of the House Professional Licensure Committee.

-- Rep. Marci Mustello (R-Butler) has resigned as a member of the House Human Services Committee.

All Mail-In Elections?

Counties across the state are starting to raise concerns about voting procedures in the upcoming June 2 election. Read more here.

Commissioners in Chester and Montgomery counties-- some of the counties hardest hit by COVID-19-- recommended the state require an all mail-in ballot Primary election to avoid virus risks of in-person voting.

Delaware County commissioners worry they cannot use their new voting machines and protect public health and suggested all paper ballots be collected and scanned in one central location.

The counties cited the fiasco in Wisconsin where voters were forced to go to the polls finding many of them closed or with hours-long lines due to the lack of poll workers.

They agreed with the sentiment in a Citizen Voice editorial saying “Voting Shouldn’t Require Risking People’s Health.”

Surprise! Trout Season Is Open!

Among all the bad news this week, there was some good for anglers. The Fish and Boat Commission surprised everyone by opening trout season early on April 7.

For those seeking to get outdoors near their homes, this lightened the mood considerably for many..

What’s Next?

CHANGE: House has notified its members they will be in session Monday, April 13 (non-voting) and Tuesday, April 14 (voting).

The only House committee meetings scheduled is the House State Government Committee on Monday to consider House Bill 2388 (Mihalek-R-Allegheny) which would reopen car dealers.

The Senate is scheduled to be back in voting session May 4, but technically remains at the call of the President Pro Tempore.

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