Monthly Archives: January 2017

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Even though Gov. Tom Wolf has signed legislation that will create statewide regulations governing transportation network companies, at least one lawmaker says the new act has Pennsylvania traveling into risky territory – and he’s potentially looking at suing to stop it.

“I’m not going to let this go; I’m adamant about declaring the [retroactive penalty] provision inappropriate and strip it,” said Senate Minority Leader Jay Costa, D-Allegheny. “What mechanism we use, I don’t know, but that’s what I’m looking to do.”  Sen. Costa also said he wouldn’t rule out filing a lawsuit.

While Act 164 of 2016, previously Senate Bill 984, is billed as ensuring the operations of ride-sharing companies, like Uber and Lyft, are properly regulated in Pennsylvania, there’s a lot more to the new law, and that’s what Costa said worries him.

“The thing that I most object to is the provision in the bill which, in my view, is special legislation for one entity, that undermines the rulemaking and enforcement of a quasi-judicial agency, the PUC [Public Utility Commission],” said Costa.

The provision in question states: “A person or entity which, as determined by the commission, operated as a transportation network company prior to the effective date of this section without proper authority from the commission shall be subject to a penalty not to exceed $1,000 per day or a maximum penalty not to exceed $250,000, notwithstanding the number of violations that occurred during the period in which the person or entity operated without authority.”

In April, the PUC voted 3-2 to adopt a joint motion ordering Uber to pay over $11 million in civil penalties for “unlawful operations” in violation of the PUC Code by “providing regulated passenger transportation service without a certificate of public convenience” from the PUC.

The penalty is currently under appeal in Commonwealth Court, and when the fine was issued, some Republican and Democratic elected officials – including Gov. Wolf himself – questioned the severity of the fine.

Costa argues the Pennsylvania Supreme Court employs a test regarding special legislation which depends on whether treating a particular class differently under the legislation is founded on real distinctions and not artificial differences used to evade the constitution. The court has held that “classification is per se unconstitutional when the class consists of one member and it is impossible or highly unlikely that another can join the class,” said Costa.

Costa said the PUC did also penalize another riding-sharing company – Lyft – which reached a $250,000 settlement in July 2015 with the PUC for, like Uber, unauthorized operations. Uber’s April 2016 penalty was $11 million, and appears to be the only one that would be affected by the new act.

Therefore, argues Costa, the retroactive section of SB984 violates Article III, Section 32 of the Pennsylvania Constitution, which prohibits the General Assembly from passing “local or special law in any case which has been or can be provided for by general law,” and, within the section’s specifications, forbids “remitting fines, penalties and forfeitures, or refunding moneys legally paid into the treasury.”

Costa’s argument runs into a bit of difficulty, according to other readers of Act 164’s language.

“Based on numerous conversations with legislative leaders throughout the process, it is our understanding that the language regarding fines is intended to address future actions,” said PUC press secretary Nils Hagen-Frederiksen.

Costa has said during committee meetings and floor debate the legislation establishes some dangerous precedents.

Costa again expressed Friday that if the Legislature can undo a fine imposed by a regulatory agency like the PUC, there would appear to be little to prevent a future General Assembly and compliant governor from undoing a fine imposed by the state Department of Environmental Protection or another government agency.

With this new law “you’re saying it’s okay to change that [an imposed fine] for a specific company, retroactively,” which undermines the ability of any governmental agency to ensure compliance with its regulations, said Costa.

Senate Republican leaders have said there is no intent by the Legislature with this act to affect the PUC penalty assessed to Uber. They have also explained, as Hagen-Frederiksen stated, the language is written to address penalties that have yet be ordered by the commission, not ones that have already been finalized.

Senate GOP spokeswoman Jenn Kocher reiterated that position. “We feel this does not affect the Uber situation, as that has been finalized by the PUC, and there’s no other action that can be taken by the PUC unless ordered by the court,” said Kocher.

Kocher also said it’s possible there are other PUC actions about which we have not yet been made aware, and for which no fine has yet been imposed, so there could be more than one matter affected by the Act 164 provision.

“It doesn’t matter what the intent is if the plain language is clear,” Costa said, noting that intent is only of interest to the courts when judges can’t clearly discern what a law does. “This plain language is clear.”

“Now that the governor has signed this, Uber doesn’t have to make the payment, and I don’t know if anyone is going to come back and say they have to – I’m mean, who’s gonna make them pay it now, when you read it and it says they don’t have to pay it?” said Costa. “It’s crazy.”

Costa made it clear he’s only focused on the retroactive penalty language within the bill.

“I’m very supportive of the underlying bill – I voted for it in the past,” he said. “I think it’s a good step in the right direction, a good beginning.”

He did note there are a few items on which he and Sen. Wayne Fontana, D-Allegheny, are working for next session to address “provisions that should be applied statewide” but are currently only available to Philadelphia.

However, while Costa approves of much of the legislation, some have noted Act 164 doesn’t contain a severability clause – which allows the rest of a law to remain in effect even if a particular portion of it is found to be unconstitutional.

If Costa should sue, and he should be successful, that could likely force the General Assembly to pass new ride-sharing legislation.

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Gov. Tom Wolf has signed into law legislation to make several changes to the state’s unemployment compensation system, but that wasn’t the only UC bill on the minds of the governor and others.

That other UC bill – House Bill 2375 – did not get to the governor’s desk, but was seen as being just as important as House Bill 319, now Act 144 of 2016 after the Nov. 3  bill signing.

HB2375 would allow the transfer of $57 million out of the UC Fund to the UC Service and Infrastructure Improvement Fund for the purposes of funding the day-to-day operations and upgrading of the UC benefit system. For the last four years, the Department of Labor and Industry has been allowed to transfer about $150 million out of the UC Fund to be used for the day-to-day operations and modernization of the state’s 40-year-old legacy unemployment compensation benefits system.

The problem is, there’s still more work to be done to modernize the system, and the department hasn’t come up with a way to pay for its daily operations of the system without continuing to transfer money from the UC Fund.

HB2375 would allow the department an additional year to transfer funds, totaling $57 million for 2017. And while the bill did win approval from the state House of Representatives during the final hectic week of session in October, the Senate did not hold a vote, stating it ran out of time.

During the HB319 bill signing ceremony, Gov. Wolf urged the Senate to concur with the bill (it has already been approved by the House) when they return to session on Nov. 16.

“It’s critical that we get this bill passed so that effective customer service can be provided,” said Gov. Wolf, in light of the 44,000 more individuals who will be accessing the system due to Act 144, “as well as all working men and women who count on a reliable unemployment insurance system.”

Sen. Lisa Baker, R-Luzerne, who took part in the HB319 signing ceremony, suggested the governor start working on Senate leaders to come back in November to hold that vote.

“Governor, I think I would encourage advocacy. As you know the Senate has not voted after elections in Sine Die, but if you can make the case why we should do that on the 16th, I think we may be willing to consider that based on your efforts and how you push that,” said Baker, majority chair of the Senate Labor and Industry Committee.

The legislative session doesn’t technically end until Nov. 30, but since 2008, neither of the General Assembly’s chambers has held voting session days after a General Election, referred to as” sine die” sessions.

Senate GOP spokeswoman Jenn Kocher offered a more pointed reaction to the Governor’s comments, writing in an email, “We are reviewing the bill with Sen. Baker and her committee but no decisions have been made. If the Governor is advocating that the General Assembly take votes during the Sine Die, it might also be an opportunity for him to collect votes for the pension plan since it also is something he claims so strongly to support.”

The most recent pension proposal did not come up for a vote in either the House or Senate  due to a lack of votes in the House. GOP leaders said Wolf didn’t try to get any House Democratic Caucus votes to pass the bill in the House (House GOP leaders said they were 3 votes short), while the House Democrats argued they wouldn’t have provided any votes if the Governor had asked since they weren’t included in the development of the legislation.

As for HB2375, the Department of Labor and Industry has warned that failure to authorize additional funding transfers could result in UC staff furloughs and potential UC call center closures.

When pressed about what happens if the legislation doesn’t get to the Governor’s desk, both Gov. Wolf and Labor and Industry Secretary Kathy Manderino said they’re assuming the situation will be resolved before January, when the department would have to “face the loss” of the funding.

“Gov. Wolf will continue to work with both Republicans and Democrats in the House and Senate to address this challenge. Regrettably, without reauthorization, the department will be forced to move forward with consolidation measures and furloughs. However, the department will also do everything it can to mitigate the negative impacts associated with no action on this issue,” stated Wolf spokesman Jeff Sheridan.

Legislative sources said they continue to have discussions with the Department of Labor and Industry, and expressed, like the Wolf administration, hope that the situation can be resolved with limited impact on the ability of individuals to access the UC benefit system.

Sen. Baker also noted the UC changes contained within Act 144 do take into account the impact on the UC Fund that the $57 million transfer within HB2375 would have, should it become law.

 

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Seasonal workers will once again be allowed to get unemployment compensation when their jobs end thanks to legislation signed into law on Nov. 3 by Gov. Tom Wolf.

“This is going to help ensure seasonal workers – those who need unemployment insurance – will have better and more efficient access to those funds. While there are many people who need unemployment insurance to get them through periods of unemployment or underemployment, our seasonal workers, in such industries as construction, use these funds to make it through the winter months … this is important to all of us,” said Gov. Wolf at the signing.

Proponents of Act 144 of 2016, formerly House Bill 319, say it’s intended to fix an unemployment compensation (UC) unintended consequence created by Act 60 of 2012.

Gov. Wolf, Rep. John Galloway, D-Bucks, and Sen. Lisa Baker, R-Luzerne, all praised the bi-partisan effort to accomplish the changes. Galloway and Baker, along with Reps. Lee James, R-Venango, Mauree Gingrich, R-Lebanon, Seth Grove, R-York, Marc Gergely, D-Allegheny, and Sens. Tina Tartaglione, D-Philadelphia, and John Gordner, R-Columbia, were credited with helping making Act 144 a reality.

Noting the difficulties of getting Act 60 passed, Baker said initially, “There was not much enthusiasm for going right back into it [Act 60] to tackle the unintended consequences and to jeopardize what had been accomplished to set the [UC] Fund to solvency.”

But she said “those who committed to finding this answer today” were to be credited for developing a “responsible remedy” that doesn’t disrupt Act 60’s path to UC Fund solvency but still ensures seasonal workers, who she said she likes to refer to as “cyclical workers,” are treated properly.

“I’m proud of our partnership on this issue, and on many issues; we’ve got some important things done – I don’t think there’s anything we’ve gotten done, working together, that’s more important than this,” said  Gov. Wolf.

Act 60 implemented measures to reduce approximately $4 billion in debt to the federal government and address the long-term solvency of Pennsylvania’s unemployment compensation system. Post-Act 60, approximately 44,000 seasonal workers were disqualified from collecting unemployment compensation. Seasonal workers who earned 50.5 percent of their annual income or more in one quarter of the year have been ineligible for benefits since the enactment of Act 60. Prior to Act 60, the limit was 63 percent.

“Act 60 really had unintended consequences, particularly for the construction industry, the pipeline industry, the nuclear industry, the power suppliers and even the highway industry,” said Frank Sirianni, president of the Pennsylvania State Building and Construction Trades Council, following the bill signing. “What you had is employees with a bulk of hours in one [employment] quarter, and you can’t get 50 percent of that in follow-up quarters.”

“This kinda levels that all off and neutralizes that problem so that the people that are doing are infrastructure, who are sometimes mandated by law – especially in the highway industry – that they’re not allowed to work at certain times of the year, that they will now be covered by benefits,” said Sirianni.

In addition to reducing from 49.5 percent to 37 percent the percentage of base-year wages earned by an employee outside their highest quarter of earnings (thereby restoring the percentage that existed prior to Act 60), the new act also:

  • Increases the reserve ratio factor for certain employers, increasing UC premiums for a limited number of employers with the very worst records of laying-off employees;
  • Adds anti-fraud and amnesty provisions to, according to bill supporters, ensure additional equity and fairness exists in the UC system;
  • Reduces benefits and caps the increase in benefits for employees at the upper end of the income/benefits scale; and
  • Implements triggers which would compare projected UC Fund solvency dates with actual solvency dates, and then institute cost-saving measures – reductions of unemployment benefits – if solvency was not being met as required by the Act 60 timetable.

Opponents of the legislation caution that Act 60’s path to solvency for the UC Fund (to occur by 2026 prior to Act 144) could be negatively affected by the addition of tens of thousands of seasonal workers, since they will add to the already higher-than-projected state unemployment rate.

Rep. Gordner, Act 60’s author, prior to the bill’s approval by the state Senate, noted Act 60’s solvency provisions assumed state unemployment rates closer to 5 percent, but Pennsylvania’s rate is currently 5.7 percent, and has been above 5 percent now for six-straight months.

While he noted concerns in the short term, Gordner acknowledged if the state can avoid another unemployment spike – similar to what occurred following the 2008-09 recession – during the next three or so years, Act 144‘s cost-saving measures to be implemented in 2020 will be beneficial to the UC Fund.

When asked about potential concerns about exposing the state to greater UC Fund insolvency risk in the short term, Gov. Wolf said the act contains “so many conditional elements that those possibilities, however remote they are, that the solvency of the fund is in good shape.”

“I think they have done a remarkable job of trying to take all the contingencies into account,” said Wolf of Act 144’s authors.

Sen. Lisa Baker, R-Luzerne, said the act includes several solvency “triggers” – which she said were “key to Senate passage” of the legislation – that “in the event that we hit one of those triggers, we will have savings and [benefit] reductions, beginning as early as 2017.”

In fact, Act 144 supporters claim those savings provisions will help to, potentially, bring the UC Fund to solvency, earlier than originally planned by Act 60 – maybe 2024 or 2025, instead of 2026.

To accomplish that, benefits will be reduced by 2 percent across the board starting next year, with the maximum weekly benefit declining from $573 to $561, and it would stay there through 2019. From 2020 through 2023, the growth of that maximum benefit would be capped at 2 percent, with that cap increased to 4 percent for 2024 and thereafter. The across-the-board 2-percent benefit reduction is expected to produce $44 million in annual savings, while the post-2024 4-percent cap is projected to deliver at least $400 million of savings annually, which is expected to grow each year thereafter.

Before Act 144, Act 60 reduced the rate of growth of the maximum weekly benefit, first freezing it at $573 through 2019, and then capping its growth at 8 percent from 2020 through 2023. After 2023, the pre-Act 60 environment would have returned with the maximum benefit being two-thirds of the average weekly wage.

In addition to three new solvency triggers – which reduce unemployment benefits for claimants if the UC Fund balance isn’t where it’s supposed to be – and the anti-fraud and “bad-actor” penalties for beneficiaries and employers, the changes are projected to save the UC Fund as much as $1.5 billion over six years while making more seasonal workers eligible for benefits, according to proponents.

The Senate voted 39-8 and the House voted 161-30 to send HB319 to Gov. Wolf’s desk for his signature.

That wasn’t the only UC bill to come up in discussions during and after the bill signing

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Pennsylvania’s revenue situation worsened a bit more in November as General Fund tax revenues came up $129 million short of estimates for the month.

However, thanks to some unexpected non-tax escheats revenue last month, total General Fund revenue collections were only $79.5 million, or 3.8 percent, short of expectations, pushing the year-to-date revenue shortfall to $261.8 million, or 2.4 percent below estimate.

During its annual economic and budget outlook briefing in November, the state’s Independent Fiscal Office forecast Pennsylvania would have a revenue shortfall of at least $500 million for the full fiscal year.

Through the first five months of Fiscal Year 2016-17, the state budget expected revenues to have grown by 3 percent, or $423 million, compared to the prior year through November.

However, compared to a year ago at this time, a new IFO report shows fiscal year-to-date revenues are approximately $160.9 million, or 1.5 percent, ahead.

As has been the case for much of the current fiscal year, Pennsylvania’s “big three” revenue generators continued to post weak results.

For November, the personal income tax (PIT) was $20.2 million, or 2.3 percent, less than estimates; the sales and use tax (SUT) was $51.9 million, or 6.3 percent, below expectations; and corporation taxes were $27 million, or 45.8 percent, less than anticipated.

According to the IFO, PIT revenues were 13.1 percent better in November 2016 compared to November 2015, largely due to a 13.7-percent increase in PIT-withholding, which was affected by a quarterly filer due date that occurred in October this year and November last year.

For the year, the “big three” are short of estimates, creating an overall shortfall of $260.3 million (about 2.7 percent less than anticipated). Year-to-date, the IFO shows PIT revenue 1.7 percent ahead of last year’s total through November, while the SUT is 0.6 percent ahead and total corporation taxes are behind by 7.4 percent. In June the IFO projected that in FY2016-16, PIT revenues would grow by 3.6 percent, SUT revenues by 3.5 percent and corporation tax revenues would contract by 2.3 percent.

Most of the state’s other revenue generators are off of their expected pace, for both November and the fiscal year thus far. However non-tax revenues are running $49.1 million better than anticipated – as mentioned earlier, they were above estimate in November by $49.5 million thanks to unexpected escheat revenue (unclaimed property) – helping to mitigate that weakness.

Of the other taxes, the state’s “sin taxes” are running closest to estimates, although still coming up short by approximately $8.1 million, or 1.1 percent, for the year, even with cigarette tax revenues – thanks to the tax hike as part of the 2016-17 budget – performing 35.4 percent better than last year through the five months of the fiscal year. For November, the tax revenue from such things as cigarette, other tobacco products, malt beverage and liquor sales, as well as table games, totaled $163 million, which was $23.1 million below estimate.

The Realty Transfer Tax (short $1.8 million in November) is $28 million, or 12.3 percent, below year-to-date expectations, while the state’s inheritance tax ($5 million short in November) is $14.5 million, or 3.8 percent, less than anticipated for the year thus far.

 

The much-hyped down-ballot problems some suggested Republican Donald Trump would cause in Pennsylvania did not appear in the races for the Pennsylvania General Assembly’s available seats in 2016.

In fact, Trump’s historic win in Pennsylvania may have helped Republicans expand their majorities in both the state House of Representatives and the Senate, with the latter chamber appearing to secure a veto-proof majority – a total of 34 seats.

All 203 seats in the state House of Representatives were up for grabs, although nearly half of the chamber’s incumbents ran unopposed, with many more in relatively safe districts. That presented a difficult scenario for Democrats hoping to slice into the Republican Party’s current 119-84 majority in the chamber. In the end, the GOP majority looks to have grown by as many as 3 seats.

If the Democrats’ path to denting the GOP’s majority in the House was difficult, their task was herculean in the Senate, where the GOP held a 31-19 majority going into the election. Twenty-five of the chamber’s 50 seats were on the ballot, but there were only a handful deemed by Republican and Democratic campaign insiders as having the ability to shift the chamber’s current political composition.

And shift it did, with Republicans winning three seats – thanks to a Trump wave in most areas of the state west of Harrisburg – and holding on to one GOP seat thought vulnerable to the Democrats.

Senate races                                                                                                                      

In a rematch of a special election earlier this year, incumbent GOP Sen. Tom Killion narrowly defeated Democrat Martin Molloy, 51.39 to 48.61 percent (a nearly 6,300-vote margin) to hold on to the 9th Senatorial District in Delaware County. The earlier special election was prompted by Sen. Dominic Pileggi’s election as a Delaware County judge.

Republicans had targeted incumbent Democratic Sen. Rob Teplitz in the 15th Senatorial District.

Teplitz’s 2012 election was in a district drawn in 2000, due to problems with the 2010 reapportionment maps. Since his election, the 15th District was redrawn to add all of heavily Republican (but not heavily populated) Perry County.

That tipped the scales for Republican challenger John DiSanto, who defeated Teplitz 51.42  to  48.58 percent (a 3,380-vote margin).

And the western Pennsylvania Trump wave crashed on incumbent Democratic Sen. Sean Wiley in his first reelection effort, following his win in 2012 with 60 percent of the vote.

Republican challenger Daniel Laughlin defeated Wiley 53.5 to46.5 percent for the Erie County seat.

Sen. John Wozniak’s decision to retire – some say due to rumors that started earlier this year that he would lose reelection – left an open seat in western Pennsylvania.

Republican Wayne Langerholc thumped Democrat Ed Cernic Jr., 62.54 to 37.46 percent, for the 35th Senatorial District, which includes Bedford, Cambria and part of Clearfield counties

House races                                                                                                                     .

Incumbent Democrat Jaret Gibbons lost his relection bid to Republican challenger Aaron Bernstine, 41.37 to 58.63 percent, in the 10th District, which includes Beaver and Lawrence counties.

Democrats look to have barely held on to the open Bucks County 31st District seat held by Rep. Steve Santarsiero, who lost his congressional bid on Nov. 8

Democrat Perry Warren defeated Republican Ryan Gallagher by 28 votes (50.04 to 49.96 percent).

Democrats did not retain the 49th District in Washington County, open due to the retirement of longtime Rep. Peter Daley, II. Republican Donald Cook defeated Democrat Alan Benyak 54.25 to 45.75 percent.

The GOP also picked up the currently Democrat-held 51st District in Fayette County, with Republican challenger Matthew Dowling besting incumbent Democrat Tim Mahoney 52.82 to 47.18 percent.

In the 58th District, open due to Democrat Ted Harhai, Republican Justin Walsh defeated  Democrat Mary Popovich, 62 to 38 percent.

In the east, the GOP thought they may have picked up another seat, but late returns appear to have given incumbent Democratic Rep. Leanne Krueger-Braneky, from the 161st District in Delaware County, a 240-vote win (50.35 to49.65 percent) over Republican Patti Rodgers Morrisette.

Incumbent Republican Harry Lewis also appears to have survived against Democrat Joshua Maxwell in Chester County’s 74th District, 51.93 to48.07 percent (or an 880-vote margin).

However, for the 115th District, incumbent Republican David C. Parker looks to have lost to Democrat Maureen Madden, 51.94 to 48.06 percent (or by a margin of about 841 votes).

Republican incumbent Tom Quigley bested Democrat Joseph Ciresi, 51 to 49 percent (a margin of 544 votes) for Montgomery County’s 146th District.

Republican incumbent Rep. Dan Truitt, who both GOP and Democratic insiders thought might lose his reelection bid may have retained Chester County’s 156th District by a scant 78 votes ( 50.11 to 49.89 percent) over Democrat Carolyn Comitta.

And in a bit of a surprise to some, Republican incumbent Martina White appears to have won reelection to her Philadelphia-based 170th District seat. White – who was a surprise win for the GOP in Philadelphia in a 2015 special election (because then Democratic Rep. Brendan Boyle was elected to Congress and vacated the seat), owing to political infighting by some of the city’s Democratic powerbrokers – defeated Democratic challenger Matthew Darragh, 54.27 to 45.73 percent.

In Montgomery County’s 150th District, Republican Michael Corr defeated Democrat Linda Weaver, 54.37 to 45.63 percent.

In Chester County’s 158th District, Republican Eric Roe defeated Democrat Susan Rzucidlo, 53.18 to 46.82 percent.

Iin Delaware County’s 165th District, Republican Alexander Charlton defeated Democrat Elaine Schaefer 56.54 to 43.46 percent.

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Josh Shapiro pulled out a clear win over opponent state Sen. John Rafferty, R-Montgomery, in their race to bring integrity back to the Office of Attorney General.

“Friends, I just want to thank you from the bottom of my heart for giving me your trust and giving me this great honor,” said Shapiro, a Montgomery County Commissioner.

After an expensive run in which the candidates focused greatly on distancing themselves from their predecessor Kathleen Kane, Shapiro beat Rafferty 51.4 to 48.6 percent.

Shapiro’s Democratic comrades for row offices also had a successful election night.

For the second election cycle in a row, all three Democratic candidates for state row offices swept the race, keeping their Democratic stronghold in executive offices.

Incumbent Auditor General Eugene DePasquale held on to his seat in his race against Northampton County Executive John Brown and Joseph Torsella, a U.S. ambassador to the United Nations, defeated his opponent Otto Voit, president of Keystone Dental Group, in the race for state Treasurer.

These down-ballot wins come on the heels of a presidential upset that resulted in a win for Republican Donald Trump and another term for incumbent Republican U.S. Senator Pat Toomey.

Pennsylvania helped push Trump to 270 electoral votes, winning 48.8 to 47.7 percent over Democrat Hillary Clinton.

The GOP-led state Legislature also maintained its majority.

 

Attorney General’s race

Though he spent much of the night in a nearby room one of his interns called “the war room,” Shapiro didn’t have much to worry about throughout the course of Election Night.

He was ahead of his Republican opponent from the time results came trickling in to the Pennsylvania Department of State website around 8:30 p.m.

At the close of reporting, Shapiro claimed wins across Pennsylvania, including Philadelphia County, Allegheny County, and Montgomery County, his home county.

He surpassed Rafferty by more than 160,000 votes, according to unofficial results.

His campaign was aided with outstanding campaign fundraising efforts and endorsements from President Barack Obama and Gov. Tom Wolf.

Shapiro raked in more than $6 million over his 10-month campaign, according to state records dating up to October 24, the most of any candidate in the history of Office of Attorney General.

Rafferty raised $1.7 million in the same timeframe.

The Democratic commissioner, who also served as a state representative from 2005 to 2012, will replace Bruce Beemer, the acting Attorney General who was appointed by Gov. Tom Wolf in August after Kane resigned.

Kane, the first Democrat and woman elected to the post, resigned from the Office of Attorney General just two days after she was found guilty of perjury and obstruction related to her leaking confidential grand jury information. She was sentenced to 10 to 23 months in prison in October.

Kane won her seat in 2012 with 56 percent of the vote, beating her GOP opponent by almost 15 percentage points.

Both Shapiro and his opponent worked to distance themselves from Kane and made rooting out public corruption a crux of their campaigns.

Shapiro made a commitment to require all OAG employees sign a code of conduct and participate in mandatory ethics training, to enforce a gift ban in the office and to appoint a Chief Diversity Officer to “make sure our team reflects the people of Pennsylvania,” he told Capitolwire following his victory

Shapiro’s opponent often highlighted Shapiro’s prosecutorial inexperience throughout the campaign, but clearly, that wasn’t a concern for voters.

Rafferty served in the OAG as Deputy Attorney General from 1988 to 1991, where he led the Criminal Law Division and Grand Jury Investigations.

Throughout the course of the campaign, Rafferty also called into question Shapiro’s commitment to serving out his tenure if elected, accusing the Democrat of trying to use the Office of Attorney General as a springboard for higher office.

“I believe that he has higher aspirations. The Office of Attorney General should not be a rental space. It should not be a stepping stone,” Rafferty said during an October debate.

Though he has set the record straight in prior interviews, Shapiro reiterated at the debate that if elected, he will serve out his full term and will likely run for a second term.

In January, Shapiro will take his seat in Office of Attorney General, but until then, he said he plans to celebrate his win with his four children and wife.

Auditor General’s race

The only incumbent row office candidate also took away a victory on Nov. 8.

Incumbent Auditor General Eugene DePasquale held on to his seat in a race against Northampton County Executive John Brown, winning 50 to 45 percent, with third-party candidates John Sweeney, of the Green Party, and Libertarian Roy Minet receiving 2.71 and 2.22 percent of the vote.

With 49.7 percent of the vote, DePasquale, of York County, was first elected in 2012 by 180,798 votes, 3.3 percentage points, above his opponent.

As Auditor General, DePasquale has headed a number of audits into charter schools, the Philadelphia Parking Authority, the state’s child abuse hotline and state pension funds. He previously served as a state representative.

Treasurer’s race

In the race to be the state’s next top fiscal watchdog, the Democratic nominee Joseph Torsella also took the win.

He had a distant lead, 50.7 – 44.2 percent, over his Republican challenger Otto Voit.

In an office plagued with corruption – the last elected state Treasurer Rob McCord pled guilty to federal charges of extortion in February 2015 and former state Treasurer Barbara Hafer facing charges of making false statement to federal authorities – Torsella’s campaign emphasized the need for transparency and integrity in the office, including investing in open data records.

He also pledged to work to establish automatic college or vocational training savings accounts for Pennsylvania’s youth and address retirement security for workers.

He will replace Timothy Reese, an Independent who was appointed by Gov. Wolf following McCord’s resignation. Reese did not seek election.

Torsella’s other challengers – Green Party Kristin Combs and Libertarian James Babb – drew 2.87 and 2.28 percent of the vote.

As state Treasurer, Torsella will oversee more than $100 billion in state assets, the state’s investments and payments and he will sit on the two public employee pension agencies.

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Despite the fact that no Republican presidential candidate had carried Pennsylvania in a

generation and no other Republican had won a statewide election in five years, Donald Trump

took  the Keystone State, beating Hillary Clinton by 50,000 votes.  Mrs. Clinton managed to carry only 11 counties in the state, several by razor-thin margins.

Adding to that electoral success was the victory of U.S. Senator Pat Toomey who bested Katie McGinty by almost 90,000  The race was the most expensive and closely watched in the country.

Although they lost the three statewide “row offices,” Republicans also managed to pad their already substantial majorities in both legislative chambers.  In the Senate Republicans now have a super-majority 34 seats and in the House Republicans boosted their advantage to at least 122. And any notions about the “inevitability” of Senator Bob Casey’s re-election should be put to rest.

Change beat anything else

Many Democrats believed that a significant demographic advantage would propel Hillary

Clinton into the history books as the first woman president.  They didn’t take into account the

“mood” advantage that the Republicans had going for them.  Every survey showed that voters

were in a foul mood, angry and clamoring for change. Nearly 70 percent said they thought the country was headed in the wrong direction.   That didn’t bode well for a woman seeking to be the third term of the incumbent president.  She shopped her extensive resume at a time when voters

wanted anything but.  Trump was the outsider.  She was the “incumbent.”  He won. She lost.

Republicans came home. Democrats stayed home.

In a contest between the two least liked candidates in the era of modern polling, Donald Trump ultimately prevailed because his base turned out while Hillary’s did not.  Trump had tremendous senthusiasm going for him.  All you needed to do was drive down one of Pennsylvania’s back roads and see the handmade signs boldly proclaiming “Trump.”  Meanwhile there was a distinct aura of apathy among Clinton’s base.  They didn’t like Trump, but they weren’t so thrilled with her, either.

​            Donald Trump needed to garner 90 percentof the Republican vote, something no winning GOP candidate had ever failed to do.  For much of the campaign he languished in the 70’s, below the level Barry Goldwater received in the 1964 landslide.  By mid-October he was in the mid 80’s.  On election night he hit 90.  Meanwhile Hillary Clinton underperformed among just about every key demographic.

Television advertising doesn’t buy as much these days

Hillary Clinton outspent Donald Trump by nearly 4:1 in television advertising.  She hammered away at his main vulnerability–his “temperament.” Her message was ubiquitous.  It didn’t work.

It was partially because voters wanted more than simply anti-Trump rhetoric.  It was also an indication of the shifts in how Americans receive information and make decisions.  Donald

Trump’s 15 million Twitter followers were as big an advantage as Hillary Clinton’s millions of

dollars in  advertising.

“Tax and Spend” is a losing message with working families

The Trump and Toomey victories, coupled with the gains Republicans made in the General Assembly here and across America were a clear repudiation of the policies of the last eight years. Obama may be personally popular for the time being, but his policies are not.  Nor are those of his political acolytes like Tom Wolf.  Although I know they aren’t taking my advice,

another budget containing big government spending and additional high taxes on working

families is a big loser.

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The Pennsylvania Senate is evaluating the future of a unique Pennsylvania industry which has generated up to 10 percent of the state’s electric power needs over the past three decades while cleaning up acid mine drainage and pollution along 1,200 miles of streams in the state and reduced air pollution from wild fires, all while recycling 200 million tons of coal waste and reclaiming 7,000 acres of abandoned coal mine land.

Beginning in the 1980s, independent electric power producers erected 14 state-of-the-art power plants across the Anthracite and bituminous coal fields of the state using high-efficiency fluidized bed boilers to generate electricity and take advantage of special, guaranteed power rates then available under state law.  Over the years, the preferential power rates expired as the electric generating industry moved to a demand-driven market model.  To keep the coal refuse industry competitive and able to continue its privately funded environmental cleanup model, the Commonwealth instituted a tax credit program of $4 a ton to incentivize utilization of coal wastes.  The total annual tax credit was capped at $7.5 million a year and is scheduled to increase to $10 million a year in 2017.

In preparation for a progress report to the Senate Environmental Protection Committee this month, ARIPPA, a coal waste industry trade association, commissioned an environmental and economic impact report from Econsult Solutions, a Philadelphia research firm.

Econsult looked at the yearly and total benchmarks achieved by the waste coal cleanup effort and projected out expected benefits for the next 20 years if the program continues to perform at or near current capacity.

The study found that:

  • 200 million tons of coal refuse had been recovered and recycled into fuel.
  • 7,000 acres of abandoned coal lands and refuse piles had been re-contoured for new, productive uses.
  • Acid mine drainage and other pollution of 1,200 miles of streams have been remediated.
  • At peak capacity, the 14 power plants were generating 1.4 megawatts of electricity, sufficient to supply one million homes.
  • The industry directly employed more than 1,500 skilled workers earning an average of $70,000 a year and indirectly supported another 3,000 jobs in nearby communities.
  • The total economic impact of the coal waste industry in Pennsylvania is about $740 million a year.
  • The total value of the environmental cleanup to be provided to the Commonwealth at no cost to the taxpayer over the next 20 years is estimated at more than $500 million.

“The coal refuse recycling incentive is unique to Pennsylvania among the mining states,” George Ellis, ARIPPA executive director, noted. “Our members are providing a valuable service to future generations of Pennsylvanians by cleaning up the historic scars of more than two centuries of mining, at no cost to taxpayers.  At the same time, we generate clean electricity.  It’s been a hugely successful partnership.”

Ellis presented the Econsult report at a recent hearing conducted by the state Senate Environmental Resources & Energy Committee held in Jim Thorpe, in the heart of the anthracite field.

“We’ve made steady progress over the last two decades in removing coal refuse and turning it into energy, along with beneficial ash that can be recycled and used to remediate mining sites and in products such as concrete and asphalt.  We generate electricity in order to pay for our environmental activities – the removal of abandoned coal refuse piles and the remediation and restoration of coal refuse affected sites.  If our industry does not survive, the cleanup becomes the responsibility of the commonwealth and its taxpayers,” Ellis told the committee.

Ellis urged the committee to preserve the recently adopted tax credit measure and to explore other opportunities for economic support and regulatory relief that would help to keep the plants operating.

# # #

(The complete Econsult report is available at www.arippa.org)

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On Nov. 2, Gov. Tom Wolf signed a handful of opioid-related bills intended to address the heroin and opioid crisis sweeping through the Keystone State. However, one bill that supporters anticipated would prevent some new cases of opioid addiction was not in the pile.

The legislation would have required insurance companies that cover opioid medication to cover abuse-deterrent opioids, a sometimes costly alternative designed to make it harder for patients to snort, crush, smoke or inject the medication.

The bill was widely supported by Gov. Tom Wolf and lawmakers on both sides of the aisle, but it was never brought up for final vote by the Senate in the final voting days of the legislative session.

Some lawmakers blamed the insurance lobby, who cited concerns about the costs of the alternative opioids, or the Pennsylvania Medical Society for rescinding its support because of last minute changes made to the bill bc

“There were a number of concerns raised about different aspects of the bill. Not one thing in particular led to it not being considered, just enough general concerns that it was thought best to wait,” said Jenn Kocher, spokeswoman for the Senate Republican Caucus.

Rep. Gene DiGirolamo, who has been a leader of opioid-related legislation for a number of years, cast some blame on outside lobbying efforts.

“My guess is, and sense is, that probably the insurance federation was very much opposed to it because of the increased costs. And my guess is that’s probably what killed the bill,” said DiGirolamo, R-Bucks.

That is in fact not that case, said Sam Marshall, president of the Insurance Federation of Pennsylvania, although the group did raise concerns about requiring insurers to cover the pricey alternatives. Most already cover ADOs, a reference to abuse-deterrent opioids, he said.

The federation didn’t support the original bill, but threw its support behind the final version of the bill after it was amended to add a requirement that the state Department of Health write mandatory guidelines for doctors who prescribe abuse-deterrent opioids and require doctors to hand out warning information with every opioid prescription, Marshall said.

“You can go buy a candy bar and there’s a warning label on it,” Marshall said. “To not have warnings attached to opioids given what we’ve seen, I just didn’t understand.”

The amendment, sponsored by Sen. Don White, R-Indiana, was unanimously passed by the Senate Appropriations Committee on the eve of the last Senate voting day.

The insurance federation believed the changes were necessary, as patient disclosures would outline the risks associated with abuse-deterrent opioids, which are still very much addictive, and create mandatory guidelines for all providers to follow, Marshall said.

Marshall was confused by the Pennsylvania Medical Society’s opposition to the changes made to the bill, he said, as prescribing guidelines and warning requirements related to minors and emergency rooms will soon be implemented through other legislation that the Medical Society supported and was signed into law by Wolf on Tuesday.

“The measures in that bill that they had concerns about, that’s what other bills were trying to do,” Marshall said. “[The bill] would extend those protections to all patients.”

Gov. Wolf signed a bill that will limit the amount of opioids prescribed in emergency rooms and urgent care centers to a seven day supply without a refill. Another bill the Governor  signed will limit the amount of opioids prescribed to minors and require parents or guardians sign a consent form and discuss the risks of addiction and overdose before opioids are prescribed.

Others pointed fingers at the Pennsylvania Medical Society for pulling its support of the bill after the changes were made, too.

“The reason it failed last week is due to opposition from the Pennsylvania Medical Society over the requirement that doctors hand out information to patients about the dangers of opioids,” said Jeff Sheridan, a spokesman for Gov. Wolf. “Over 3,500 people died from overdoses last year and everyone should be stepping up to do their part to find solutions to fight this crisis.”

“The last minute concerns raised by the Medical Society, as well as concerns over the high costs of [abuse deterrent opioids] delayed a final vote,” said White.

The medical society opposed the mandate put on doctors to distribute the warning information, saying it will interfere with and hurt patient care.

“We thought that [amendment] was interfering with the doctor-patient relationship,” said Charles Cutler, a physician and president of the Pennsylvania Medical Society.

Cutler said it would adversely affect patients whose risk of addiction is low, including patients who are prescribed opioids for extreme pain related to late-stage cancer and elderly patients who have suffered injuries.

“Patients like that need opioids for their pain,” he said. “In that situation, the risk of addiction is virtually nil. So, to frighten a patient with a conversation of addiction and dangers of the drug, when far and away the drug is going to be beneficial, would be counterproductive.”

Most doctors already voluntarily provide their patients with risk disclosures, he said.

The medical society sent a letter to lawmakers on the last voting day scheduled for the Senate, detailing their opposition to the bill.

The society and the state Department of Health have already created recommended guidelines for prescribing opioids and abuse-deterrent opioids, too, Cutler said, addressing the other change made by the amendment.

The group “solidly” supported the bill before the changes were made and would support it if the language was removed, he added.

While the bill wasn’t addressed this session, all parties hope to see a measure addressing abuse-deterrent opioids in some fashion in the future.

“The governor is disappointed that this bi-partisan legislation did not pass and he plans to continue working with both parties in the legislature to get this bill to his desk,” Sheridan said.

 

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Feeling Confident: Steps to Saving More

*In 2016, 21% of U.S. workers said they were very confident they would have enough money for a comfortable retirement. This was about the same percentage as in 2015, but both years showed a big increase in confidence from the 13% level in 2013, when many Americans were still struggling to recover from the Great Recession.1

When it comes to your own retirement, of course, trends don’t really matter. The question is, do you feel very confident that you will have enough money to enjoy the kind of retirement you envision? Even if you do, it’s smart to save more, and it may not be as difficult as you think.

Take the Match                                                
If you participate in a workplace retirement plan such as a 401(k), 403(b), or 457 plan, you can choose to contribute a specific percentage of your salary, up to annual contribution limits. That’s why they are formally called defined-contribution plans. More than half of workplace plans automatically enroll new workers at a 4% rate.2 However, a common guideline suggests that workers should save about 15% of their salaries, and you may need to save more if you get a late start.

One of the best ways to boost your savings is to take advantage of any matching funds offered by your employer. For example, if your employer will match 50% of your contributions up to 6% of your salary, saving 6% on your part would result in saving 9% of your salary (6% from you and 3% from your employer).

Increase by Increments
How can you save even more? You might try increasing your contributions by 1% each year. Some employers may increase your contributions automatically (unless you opt out), but you can choose to do so on your own, whether you participate in a plan or save outside of the workplace. A 1% increase may not sound like much, but it could make a big difference over the course of your career (see chart).

Here are three other ways to save without making a big sacrifice in your cash flow.

Save your raise. When you receive a raise, it’s tempting to increase your spending, but this is a great opportunity to boost your retirement savings by diverting a portion of the raise into your retirement account. And when you contribute on a pre-tax basis, the difference in your take-home pay may not be significant.

Make payments toward your future. If you pay off the balance on a car loan, student loan, or credit card, consider making the same monthly payments directly to your retirement account. Because the payment is already part of your monthly budget, you could increase your savings without reducing the amount available for other expenses.

Limit the treats. You deserve an occasional reward, but spending on “little things” can add up over time. For example, if you stop for a $4 latte each day on your way to work and have another one in the afternoon, you would spend about $175 each month. If the same amount was instead invested monthly in an account earning a 6% annual return, you could accumulate more than $100,000 after 25 years.3

Happy Investing!

Scott C. Weaver.

1) Employee Benefit Research Institute, 2016
2) Aon, 2016
3) This hypothetical example is used for illustrative purposes only and does not represent the performance of any specific investment. Fees, expenses, and taxes are not considered and would reduce the performance described if they were included. Actual results will vary.
The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright 2016 Emerald Connect, LLC.

 

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