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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.

 

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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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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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Sen. Scott Wagner, R-York, says Gov. Tom Wolf is “playing politics with people’s lives” by planning to close three unemployment compensation (UC) call centers less than a week before Christmas.

Wagner also claimed the governor and his administration had planned to close at least one of those three call centers – the Lancaster facility – prior to the UC funding issue Wolf has said prompted his decision. The senator, who has been the focus of plenty of labor union and administration criticism during the battle over funding, said he learned of those plans during a visit with Lancaster UC call center employees late last week.

“What I learned is shocking,” Wagner told state Capitol reporters during a Dec. 5 Capitol Rotunda press conference. “Many of the employees agree with my colleagues and I that these closings are purely political. I was told that employees had been hearing for months that the Lancaster call center may be closing in June of 2017 anyway.”

A source close to the UC call center situation said for roughly the past 6 months there have been at least perceived threats, from the perspective of call center staff, of closures and furloughs based on funding, but nothing concrete. Each of the smaller centers has thought they were on the chopping block at some point during that time, with rumors of several different scenarios involving staff reductions and center closures to help overcome funding shortfalls, said the source.

When asked if he was accusing the Wolf administration of using the current funding issue as a way to redirect blame at Senate Republicans for potential closings the administration may already be planning during the next several months, Wagner said, “Yes.”

Wolf spokesman Mark Nicastre wrote in an email that “prior to the outcome of HB2375, the administration had not made any decisions” regarding the closure of any centers.

However, Department of Labor and Industry spokeswoman Sara Goulet confirmed a center closing has been under consideration by the department, but noted lawmakers were informed of that potentiality and no furloughs would be necessary.

Goulet said in a document sent to the Legislature on Oct. 14,  the department stated: “In order to begin reducing the UC Program’s reliance on the Service and Infrastructure Improvement Fund, along with the recent announcement of a 5 percent reduction in federal funding, the department would still require a consolidation of one call center in 2017, this would occur during the second quarter of the calendar year. The intent of this consolidation is to provide the department with operational savings, and would not require any furloughs.”

No additional details regarding the potential consolidation – which by the department’s time frame would occur sometime during April, May or June of next year – were provided.

Wagner, who intends to run for governor and has been critical of Wolf, the man he could potentially challenge, said he has filed a right-to-know request with the department regarding various records related to the closing of the call centers. He indicated he’s hoping to find out if indeed these temporary closures and furloughs are more political smokescreen than fiscal necessity.

 

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By Dr. Andrew Herlich 

 

According to the 2015 Annual Child Protective Services Report from the Pennsylvania Department of Human Services, there is a slow but unsettling increase in the number of reports of abuse to the Department over the past 5 years. Does this statistic report the increase in the number of incidents or is this an increase in the number of reports filed over time?

The report for 2015 with data that was current to February 8, 2016, consists of more than 140 pages and is quite detailed in its analysis. I applaud the Department for their comprehensive work.  Forty-seven pages are detailed descriptions of events in each county that had either a near-fatal or fatal event.  Additional data demonstrates that the overwhelming number of perpetrators are unemployed by a margin of 60 percent in fatal and near fatal events.  A similar overwhelming number, 87 percent of perpetrators have no more than a high school diploma.

The report’s data horrified me. Responsible for sixty-two percent of the fatalities and 73 percent of the near fatalities were parents of the children.  Most of these came from a single parent family with or without a significant other (paramour in the report’s parlance) that may be party to the abuse. By a factor of 4.5 to 1, the reports showed serious bodily harm versus serious neglect.  Of the $1.769 billion dollars spent on child welfare, $52.587 million was spent on investigations. It is a sad situation such a vast sum of money needed to spent for legal investigation of child harm.

What is lurking in the background of this report are the bruises, the psychological abuse, the neglect that doesn’t get reported because there are too many of these “near misses” to the data.  No family would voluntarily report that they are neglecting or harming their children.  The abuse or neglect is much greater than this comprehensive report could ever generate.  Who is going to speak for the one week old baby that was shaken to the point of brain hemorrhage and death?  Who is going to make sure that the single 17 year old mother of a one month old has sufficient support services to reduce the risk of abuse? Furthermore, what about the child survivors of physical or psychological abuse?  Should there be legislation to help them heal their wounds irrespective of the time when the abuse occurred?  Should the individuals who saw abuses be castigated for reporting it such as Mike McQueary an Assistant Football Coach at Penn State?

Consequently, when a bill is proposed to retroactively investigate and possibly punish prior abusers for adult victims up to the age of 50, the bill never gets moved. Why does this happen?  Opponents to the bill protested due to concerns that private sector abusers such as those from religious school or religious backgrounds would be treated differently than the public sector abusers.  The bill that overwhelmingly passed in the House in April of this year was changed in the Senate and referred back to the House and then died due to inaction.  Now, abusers, who were hiding behind the shield of time, are given essentially a free pass to hide or to possibly abuse again.  We should be ashamed as a society for spending more time wordsmithing the legislation rather than enacting it.  Fairness to the perpetrators was the greater concern rather than the victims of child abuse irrespective of age.

I see abuse and neglect all too often as a physician who treats children with burns.  Caregivers who immerse infants or children in scalding water is an example of abuse.  Parents who permit their children to get too close to family camp fires are another example of these burns of neglect.  There are truly accidental burns which are no less scaring internally as well as externally.  Nevertheless, we need to assure that these children who survive these physical and emotional scars get all of the care that they deserve.

In order to improve the data in the Annual Child Protective Services Report, we need to provide for societal changes.  We need to ensure that there are fewer single parent homes.  We need to incentivize adolescents to finish high school and get more advanced vocational or educational training.  We must make every effort to increase employment.  We need to make sure that child abusers do not abuse again.  We need to ensure that neglecting children is no less of a problem than child abuse.  Society has to speak for and protect these innocent victims and not portray that the perpetrators as the victims.  If the perpetrators were victims themselves in the past, then we need to address that issue as well.

 

 

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Will money play a crucial role in state row office elections?

By Carley Mossbrook, Capitolwire

Democratic candidates for state row offices swept their Republican contenders in contributions and spending during the first four-and-a-half months of this year’s election season.

 

Between Jan. 1 and May 16, the Democrats running for attorney general, auditor general and treasurer raked in $3,532,796, while their Republican counterparts brought in $457,103, according to the candidates’ finance reports.

 

The GOP challengers also spent much less over the spring season, which included the primary election, $700,491 to the Democrats’ $3,296,071, with most of the money going to and flowing from Montgomery County Commissioner Josh Shapiro and Sen. John Rafferty, R-Montgomery, the two candidates running for Attorney General.

 

Though this may come as a concern for the state Republican Party, it is unclear how important a financial edge will be for the row office candidates.

 

“Overall, these are not the highest profile elections,” said Terry Madonna, director of the Center for Politics and Public Affairs at Franklin and Marshall College. “They’re running in a year in which we have a presidential election going on and the U.S. Senate election that makes it even more difficult for them to gain traction and to get a lot of press attention.”

 

Therefore, money may not be the most important factor to win them a seat, he said.

 

Instead, the winners will likely come down to which party turns out more voters and who wins the presidency and U.S. Senate race, he said.

 

“Because these voters aren’t going to know these candidates for row office, for the most part, that coat-tail is important,” he said.

 

However, the coat-tail advantage may only help if the presidential race turns out to be a big win for Democrat Hillary Clinton or Republican Donald Trump, said Chris Borick, professor of political science and director of the Muhlenberg College Institute of Public Opinion.

 

If the race appears to be close leading up to Nov. 8, money is going to be all the more important to give them a boost, he said, calling the candidates “hostage to what happens at the top of the ticket.”

 

If recent polls are any indication of the presidential election’s competitiveness, the row office candidates may want to have their wallets ready.

 

A Sept. 11 Quinnipiac poll shows Clinton’s lead over Trump dropped by 4 percentage points, from 52 percent to 48 percent, in Pennsylvania since Aug. 9. Trump’s likelihood of winning grew by 1 percent, from 42 to 43 percent. Undecided voters made up 5 percent of the polling sample.

 

Row office candidates typically receive minimal attention during the general election – thanks to the noisy and crowded atmosphere of presidential and Senate races, Borick said – but have received even less this year.

 

The lack of attention will force candidates to pull out all the stops to sway voters to their corner by November, he said.

 

“There’s going to be a real diverse effort to get the attention of voters,” Borick said, including fighting for limited television ad time and utilizing social media, which offers a free platform for those strapped for cash.

 

Candidates may also choose to selectively pick the markets where they run their ads rather than run them statewide, Madonna said.

 

“You can target markets because of what you’re trying to accomplish there, because of the message you have and how it plays with the subset of voters,” Madonna said. “My hunch is that we’re likely to see in the row office races more targeted messaging in particular TV markets in the state.”

 

Without much provocation, the Attorney General’s race will likely garner the most attention, he added.

 

“You have two much more high-profile people – a former House member and Montgomery County Chairman, and a current state senator – while these other offices don’t have the same profile,” Madonna said.

 

OAG has also frequently been in the news following former Attorney General Kathleen Kane’s August conviction on nine criminal charges, including perjury and criminal conspiracy.

 

Rafferty may use this as an opportunity to leverage the attention thrown at Kane to tie her to Shapiro and other Democrats, while Shapiro will look to distance himself from her scandal, Borick said.

 

Whichever avenue the candidates take won’t excuse them from the greatest challenge to both of their candidacies, getting voters to actually cast a ballot.

 

“The level of attention given to these candidates and the level that should be given is very much in contrast,” Borick said.

 

In light of Kane’s conviction and recent corruption scandals involving two former state treasurers, voters should make an effort to pay attention to who is running for these offices, he said.

 

“These offices matter to the state, the quality of life in the commonwealth, how money is spent and how the legal system is administered,” Borick said. “They aren’t trivial matters.”

 

Before the pre-General Election spike in campaign fundraising and spending takes off, Capitolwire broke down how much the candidates for state row offices spent during the last three reporting cycles and how much cash each had on hand leading up to the summer season. The analysis is below.

 

Candidates are required to report their financing for the summer months by Sept. 27. Capitolwire will have a breakdown of those numbers once the reports become available.

 

Attorney General: Josh Shapiro (D) v. John Rafferty (R)

Shapiro’s fundraising and spending surpassed Sen. John Rafferty, R-Montgomery, in their race to replace sitting Attorney General Bruce Beemer and to, as both say in the campaign paraphernalia, bring integrity back to the Office of Attorney General.

 

Beemer was appointed by Gov. Tom Wolf in September following Kane’s conviction and resignation.

 

Shapiro, the Democratic contender who has sat on Montgomery County Board of Commissioners since 2011 and served in state House from 2005 to 2011, outraised and outspent his opponent by large margins for the first half of the year.

 

Shapiro’s reports show he started the year with zero dollars and Rafferty $33,178 from last year’s fundraising efforts.

 

Over the first three reporting cycles Shapiro received $3,038,666 in contributions, which includes three contributions moved from his campaign committee for commissioner and his legislative seat totaling more than $1.2 million.

 

He received an assortment of large contributions from attorneys, developers and real estate owners over the course of the spring, including $50,000 from David Magerman, president of the Kohelet Foundation in New York; $50,000 from Michael Rubin, founder and CEO of Kynetic in Conshohocken; $36,000 from Joseph Neubauer, former chairman and CEO of Aramark in Philadelphia and $25,000 from Jamie Maguire, executive chairman of the Philadelphia Insurance Company.

 

A number of political action committees donated large contributions to his campaign, as well: Students First PAC gave him $100,000, SEIU PA COPE donated $30,000 (their healthcare PAC donated another $20,000) and Friends of Matt Bradford, the committee for Rep. Matt Bradford, D-Montgomery, donated $35,000.

 

Gov. Tom Wolf also pitched in $11,000 to Shapiro’s campaign.

 

Though Shapiro’s opponent may have more experience within the OAG, he seems to be lacking the financial edge.

 

Rafferty served as the Deputy Attorney General from 1988 to 1991 before serving on the Montgomery County Board of Assessment Appeals from 1996 to 2002. He’s been a member of the state Senate since being first elected to it in 2002.

 

He received just $399,170 in contributions during the first three cycles of the season, which include his landslide primary win over federal prosecutor Joe Peters.

 

Rafferty received far fewer and smaller contributions than Shapiro. Some of his larger, notable contributions include $10,000 from Andrew Muller Jr., president of the Reading Blue Mountain and Northern Railroad in Port Clinton; five contributions from employees at Audubon Land Development totaling $35,000 and $5,000 from his fellow legislator Sen. Scott Wagner, R-York.

 

His largest contributions came from political action committees, including $50,000 from Build PA PAC; $12,500 from PA Future Fund; $10,000 from Troopers Association PAC; $50,000 from Friends of Joe Scarnati, the campaign committee for the President Pro Temp of the state Senate and $5,000 from Citizens for Prosperity in America Today, the political action committee affiliated with Republican U.S. Sen. Pat Toomey, who is running his own campaign in a critical race against Democrat Katie McGinty.

 

Alongside his individual contributions, Rafferty received $93,794 in-kind contributions to Shapiro’s $51,436. In-kind contributions are services or materials donated to the campaign, like office space and travel accommodations.

 

But with more money came more spending for Shapiro. His reported expenditures totaled $3,031,290, almost all of what he brought in during the five-month period.

 

Most of Shapiro’s funds were spent just before his competitive primary contest against Allegheny County District Attorney Stephen A. Zappala Jr. and Northampton County District Attorney John Morganelli on April 26.

 

Shapiro beat Zappala by 10 percentage points and Morganelli by more than 30 percentage points in the tight race focused on prosecutorial experience. Endorsements from President Barack Obama, Wolf and former Gov. Ed Rendell likely aided his efforts.

 

Rafferty, on the other hand, was more modest in his spending, dishing out $283,943 in expenses.

 

At the close of the spring season, Shapiro was sitting on $114,241 in unpaid debts and obligations and had $7,376 cash-on-hand, while Rafferty reported no unpaid debts or obligations and began the summer with $148,405 in cash-on-hand.

 

Money doesn’t appear to be a concern for the Rafferty campaign at this time. His team seems to be relying on the senator’s qualifications and experience to propel them to a win in November.

 

“Sen. Rafferty has been committed to raising the amount of money he needs to win this race. We are in it to have a victory in November,” Mike Barley, Rafferty’s campaign manager said.

 

He said the campaign opts to remain coy about how they plan to raise and spend money leading up to the election season, but said he believes Rafferty’s qualifications and experience will aid him in fundraising going forward.

 

“It’s certainly been helpful. I think a lot of people were concerned that the previous Attorney General Kathleen Kane didn’t have the experience necessary…,” he said. “I think that’s a big issue. Commissioner Shapiro has no experience for this position.”

 

Shapiro’s camp sees it differently.

 

Shapiro’s “record of integrity and pragmatic, bipartisan achievement” on the Montgomery County Commissioner’s board led to a large response in donations, wrote Joe Radosevich, Shapiro’s campaign manager, in an email.

 

“Thousands of Pennsylvanians responded to Josh’s broad experience and plan to be the people’s Attorney General with donations, which we’re grateful for,” he wrote.

 

Radosevich didn’t appear concerned about Shapiro’s large debt and little cash-on-hand reported at the end of the last cycle either. More than four more months of fundraising and campaigning have passed since the last reporting period.

 

“We’re extremely confident our message, of how Josh will be the people’s Attorney General and stand up to the powerful to protect Pennsylvanians, will be heard,” he wrote. “We have the resources because thousands of everyday Pennsylvanians trust Josh and believe he’s the best person for the job.”

 

Auditor General: Eugene DePasquale (D) v. John Brown (R)

 

In the only race that includes an incumbent, Auditor General Eugene DePasquale found much more success bringing in funds before and after the primary election compared to his Republican opponent John Brown.

 

He also started the year off on a better foot, with $149,386, compared to Brown, the Northampton County Executive, who brought forth just $810.

 

The disparity in their fundraising was evident from the start and continued into the third cycle of reporting. In total, DePasquale brought in $258,726 in contributions and Brown only received $32,477.

 

The two ran unopposed in the primary. Less competitive races typically mean less fundraising and spending, Madonna said.

 

DePasquale brought in a few large donations from notable individuals, including $5,000 from William and Michele Shipley, chief executive officer of the Shipley Group in York; $2,500 from Dan Hilferty, president and CEO of Independence Blue Cross and $2,500 from Ross Nese, executive of Grane Healthcare.

 

State Secretary of Agriculture Russell Redding, also donated $500 to DePasquale’s campaign.

 

DePasquale’s larger donations came from political action committees, including $20,250 from IBEW Local 5 in Pittsburgh; $17,500 from PSEA PACE in Harrisburg; $10,000 from McNees PAC in Harrisburg; $10,000 from Laborers District Council in Philadelphia; and $5,000 from Comcast Corp. & NBC Universal PAC in Philadelphia, among others.

 

His opponent, Brown, received only three contributions over the five-month period, including $25,000 from Charles Chrin, executive of Charles Chrin Companies in Easton; $2,427 from David Ceraul, an attorney at Ceraul Law Offices in Bangor and $5,000 from Citizens for Prosperity in America Today.

 

DePasquale also received $2,234 in in-kind contributions, while Brown received $13,990.

 

The incumbent outspent his Republican opponent by more than double too. DePasquale’s expenses reached over $54,000 and Brown’s broke $26,000.

 

At the end of the last reporting period, DePasquale reported no outstanding dues, while his opponent reported more than $35,000 in unpaid debts and obligations.

 

Brown’s remaining cash balance of $6,777 didn’t come close to DePasquale balance of $353,519 going into the summer months.

 

Along with more contributions, DePasquale also has an incumbent’s advantage aiding him in his efforts, Madonna said.

 

“That’s one of the natural advantages of incumbents, he can talk about what he’s doing and it’s hard to criticize him for that because that’s his job,” Madonna said.

 

It’s worth mentioning a Democrat has claimed the Auditor General’s Office in all but one election over the last six decades.

 

Treasurer: Joseph Torsella (D) v. Otto Voit (R)

 

The Democratic challenger in the race for state Treasurer, the least acknowledged of the three row offices, also outraised his opponent by a landslide.

 

Joseph Torsella, a retired U.S. Ambassador to the United Nations and former chairman of the Board of Education, outraised his opponent Otto Voit by nearly nine times during the five-month period.

 

Torsella was ahead by more than $1 million right out of the gate, when he brought $1,504,860 from last year’s fundraising into the 2016 cycle. He began campaigning for the office in December 2014.

 

Voit, a businessman and president of Keystone Dental Group, brought forth $504,566 from the previous year.

 

Torsella’s contributions surpassed Voit’s during the first three cycles too. The former ambassador brought in $235,404 in contributions compared to Voit’s $25,456.

 

Voit did receive more in-kind contributions over the period – $13,990 to $5,463.

 

Most of Torsella’s larger contributions were given by political action committees, including $10,000 from Students First PAC in Wynnewood; $25,000 from Local Union #98 I.B.E.W. Committee on Political Education in Philadelphia; $5,000 from FNB Corporation PAC in Pittsburgh and $2,500 from PNC PAC in Pittsburgh, among others.

 

He received many individual contributions from lawyers and company executives. The most notable of them was a $500 donation from David Montgomery, chairman and former president of the Philadelphia Phillies.

 

Voit’s contributions were slim throughout the spring. He received a single contribution during the first cycle, which ran Jan. 1 through March 7. In the second cycle, he picked up 10 individual contributions and two contributions from political action committees, including $5,000 from PA Banker’s PUB Affairs in Harrisburg and $2,500 from PSEA- PACE For State Elections in Harrisburg.

 

In the last reporting cycle, Voit received nine individual contributions and two more from political action committees, including $5,000 from Citizens for Prosperity in America Today.

 

Though he received fewer contributions, Voit spent much of his savings. He dished out $390,038 to Torsella’s $210,198, and at the end of the third cycle, reported $280,000 in unpaid debt and obligations to Torsella’s $55,000.

 

Torsella had more than $1.5 million to propel him through the summer season, while Voit closed out the spring with $139,984.

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By Neal Lesher 

Gov. Tom Wolf recently signed two regulatory relief bills, drawing the ire of environmental activists. One dealt with controversial oil and gas regulations and the other involved the Obama Administration’s Clean Power edict. Environmental groups were quick to pounce on the Governor for coming to an agreement with a bipartisan group of lawmakers who had been raising concerns over these regulations for some time.

We think the Governor made the right decision. We applaud him for practicing common sense.  Small-business owners know too well the impact an out-of-control regulatory climate is having on their business and our economy. Poorly crafted rules can be devastating for small businesses. Most small employers don’t have the staff to research new regulatory requirements, develop a plan to comply, or implement that plan. More and more of a small-business owner’s time and money is spent dealing with government regulations, taking away from improving products, enhancing customer service, and growing their business.

Small conventional oil and gas producers raised concerns when the Department of Environmental Protection (DEP) recently rammed through sweeping regulations that lumped them in with larger oil companies doing unconventional drilling. They testified at hearings that the new rules would force smaller companies out of business. Nearly all of Pennsylvania’s conventional oil and gas producers are small businesses — as are the supply stores, excavation contractors and other companies, indirectly involved with conventional oil and gas production.

These conventional gas drillers have been in Pennsylvania since the first shallow well was drilled in Titusville in 1859. That’s why the sudden need for comprehensive new regulatory requirements puzzling. The DEP failed to provide anything but anecdotal evidence of the need.

More troubling was the process the agency used. Not only did DEP fail to develop two sets of regulations for small and large drillers, as required by Act 126 of 2014. The agency also did not comply with a law requiring it seek less costly alternatives for small businesses or prove why that can’t be achieved. In some cases, DEP did no analysis at all. NFIB fought hard several years ago to have those provisions added to the Regulatory Review Act to protect small businesses.

These agency actions should serve as a warning sign for small businesses in every industry.  If regulators are willing to abuse their power to run roughshod over one industry, what businesses are next?  Ultimately, the Governor made the right decision by hitting the reset button and blocking these regulations from going into effect.

The coal industry in Pennsylvania is also aware of the impact of overreaching government regulations. Many small businesses in Pennsylvania serving the coal industry have already been hit hard by both regulations and market changes. Now those companies risk being wiped out altogether by the implementation of President Obama’s Clean Power Plan.

Even though the Supreme Court delayed implementation of the Clean Power Plan after NFIB and others sued, there was still a concern in Pennsylvania when the DEP indicated it was still moving forward.

Lawmakers representing the coal regions responded by crafting a bill that ensures the state legislature can weigh in on any plan the DEP develops. The bill would also prevent the agency from submitting the Plan to the EPA until the Supreme Court stay is lifted.  NFIB hopes in the long run, the federal courts see the Clean Power Plan for what it is and permanently strike it down.

NFIB is encouraged to see Governor Wolf agree to these changes and pleased to see the Legislature rein in the regulatory machine.  Hopefully, this is a starting point that ultimately leads to further regulatory reforms that will provide relief for small businesses.

Neil Lesher is NFIB Pennsylvania’s Legislative Director. NFIB is the leading advocate for small business owners, with offices in Washington, D.C., and every state capital. Its  mission is to defend the right of small business owners to run their businesses without undue government interference and to advance public policies that promote their success.

 

 

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The Senate dropped charter school reform language from an amendment to House Bill 1606, the Public School Code, Wednesday, clearing the path toward final passage for all the remaining code bills and a long-awaited revenue deal.

While this bill will help usher in the end of the 2016-17 budget battle, it appears the struggle over charter school reform will rage on into the fall.

“We didn’t come to a consensus on the provisions (for HB 1606),” said Appropriations Majority Chairman Sen. Pat Browne, R-Lehigh. “There’s a lot of moving parts here and it’s a difficult issue to reconcile, so we have to do it right.”

The move appeased left-leaning policy organizations and legislative Democrats who panned the charter reform components of House Bill 530 — the House’s version of the Public School Code, from which HB1606’s amendment would have borrowed heavily — as overreaching, nonsensical and providing for the “unfettered expansion” of charter schools.

The language provided for multiple charters to consolidate and share administrative services, reorganized the Charter School Appeal board to include additional charter school representatives, designed a new and separate performance matrix for charters, extended renewal terms from five to ten years and — crucially, critics say — did not allow school districts to cap charter school enrollment.

Some other provisions, including a Charter School Funding Advisory Commission and a state-created enrollment application, were left out of HB1606 too.

What’s left in HB1606 spans 75 pages and does a lot of “housekeeping” — moving education provisions from the 2015-16 Fiscal Code into the more appropriate school code vehicle, including the special education funding formula, the PlanCon Advisory Committee, elimination of the pension double dip and the organization of a regional community college in the western corner of the state.

As anticipated, the bill distributes $1.1 billion in special education funding; $250 million from the Ready to Learn Block grant; $232.1 million in community college funding; $54.4 million for public libraries and $3 million for career and technical education equipment grants.

New this year, the school code will establish two pilot programs: one will provide $250,000 in grants to school districts interested in consolidating administrative services and another will establish a Drug and Alcohol Recovery High School in Philadelphia. The state will cover 60 percent of the $20,000 tuition rate for the school, which will admit 20 students from the city through 2019-20. The state departments of Education and Drug and Alcohol will assess the school’s performance and make recommendations for expansion or extension beyond the 2020 sunset.

The bill also authorizes the E-achievement Program, a hybrid learning grant program rewarding schools for blending “digital resources with traditional classroom teaching.” Schools may apply for a $50,000 planning grant and an implementation grant “not to exceed $250,000 annually.” Schools are limited to three implementation grants in a five-year period.

The amendment also appears to reference a PDE policy decision announced in January explaining the department would no longer mediate payment disputes between districts and charters for any money owed beyond the current school year, citing a 2012 Commonwealth Court decision regarding a $7 million underpayment dispute between Chester Upland School District and Chester Community Charter School.

Charter groups argued against the policy change and said it forces expensive lawsuits in order to collect tuition debts, but PDE spokeswoman Nicole Reigelman said, in April, the department was simply updating the policy to comply with the court decision — something that was long overdue.

HB1606 clarifies charters must submit final documentation to the department no later than October 1 for tuition payments owed for the previous school year by the authorizing district. Once submitted, the state would deduct the debt from the district’s subsidy and redirect it to the charter school. There’s no mention in the bill of the department’s involvement in reconciling charter school tuition disputes for previous school years.

Once mainstays in the Tax Code, the Educational Improvement Tax Credit and Opportunity Tax Credit Scholarship programs were moved into HB 1606 this year, along with a $25 million funding boost for EITC.

Under the EITC program, businesses who donate to scholarship funds, educational improvement programs or prekindergarten programs can receive a tax credit for up to 75 percent of their donation — that jumps to 90 percent if the business commits the same amount for two consecutive years. With just $100 million set aside by the state for EITC, however, the tax credit is awarded on a first-come, first-serve basis — through the Department of Community and Economic Development (DCED) — and runs out quickly.

The OSTC program authorizes a 75-percent or 90-percent tax credit to businesses who donate strictly to a scholarship fund for students living in the bottom 15 percent of school districts statewide. The state then uses income guidelines to award tuition assistance to select students so they can attend a nearby private school. The program’s funding is half of what is awarded through EITC, at just $50 million.

Some 1,300 business applied for tax credits in 2014, though the program remains unpopular among legislative Democrats who say the public money is awarded without accountability and shouldn’t funnel into private schools.

The underlying language in HB1606 would codify the searchable database, called SchoolWATCH, that details the revenues and expenditures of Pennsylvania school districts.

It’s the fourth time some form of the bill has moved through the General Assembly. The bill’s language was taken directly from House Bill 224 — an Education Code bill Gov. Tom Wolf vetoed in September 2015.

Currently, SchoolWATCH is available online via the School Performance Profile website. It was a policy move implemented in former Gov. Tom Corbett’s last weeks in office in January 2015. Without any codifying legislation, the Wolf administration could remove the tool at any point. The passage of the school code Wednesday ensures the permanency of the web tool for administrations to come.

The Senate and House overwhelmingly passed HB1606 Wednesday afternoon, on votes of 47-3 and 172-18, respectively.

Meanwhile, a provision stipulating the process PDE must follow to ensure timely intercept payments during any future budget impasse was slipped into the Fiscal Code, House Bill 1605. The existing Pennsylvania School District Intercept Program provides that the Secretary of Education will withhold current or future basic education funding or state aid payments from a school district that fails to make a debt service payment and remit the funds directly to the paying agent bank for the benefit of bondholders.

Another Fiscal Code provision requires PDE perform an analysis on the separation of previously-consolidated school district and provide a written report to the requesting school board within six months. There is no language in the provision describing the identity of the district.

After the approval of the revenue and code bills Wednesday, the House sent to the governor the non-preferred appropriations bills to providing, combined, nearly $600 million in funding to Pennsylvania’s state-related universities: Penn State University, the University of Pittsburgh, Temple University, Lincoln University and the University of Pennsylvania. The governor has said he will sign those bills into law.

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A Pennsylvania Commonwealth Court has upheld Sunoco Logistics Partners’ power to take private property for its Mariner East Pipeline, adding momentum to Sunoco’s plan to deliver more energy from the Marcellus Shale region to Marcus Hook.

The court, in a 5-2 ruling, affirmed a Cumberland County judge’s decision last year that Sunoco’s pipeline subsidiary is a public utility as determined by the Pennsylvania Public Utility Commission, which Sunoco says gives it the authority to take rights of way from property owners who decline to negotiate agreements along the pipeline’s 351-mile route.

The majority opinion, written by Judge Renée Cohn Jubelirer, concluded that “Sunoco is regulated as a public utility by PUC and is a public utility corporation, and Mariner East intrastate service is a public utility service.”

Sunoco Logistics called the ruling decisive. “Although this case confirmed Sunoco Pipeline’s public utility status, we have always worked with landowners to reach mutually acceptable agreements, and pursued legal proceedings only in those instances where an agreement could not be reached.”

The Mariner East project, which would deliver natural gas liquids like propane, butane and ethane to Delaware County, still faces obstacles that were unresolved by the July 14 ruling.

A separate suit, filed last year in Philadelphia by the Clean Air Council, also argues that Sunoco has no legal right to use eminent domain to build its pipelines, which it argues would not serve a public need.

“This is not the end of the story,” said Alex Bomstein, a Clean Air Council attorney. He said the ruling on Thursday was “quite narrow” and did not address the constitutional challenges raised by the Philadelphia suit, including arguments that the pipeline violates the state’s Environmental Rights Amendment.

Bomstein said the issues will ultimately be decided by the state Supreme Court.

The state environmental protection agency has set five public hearings next month on Mariner East, including one on Aug. 10 at West Chester University.

The Mariner East project links shale-gas producers in western Pennsylvania, West Virginia and Ohio to a Sunoco’s Marcus Hook Industrial Complex, a former refinery site on the Delaware River. The $2.5 billion project was backed by the Corbett and Wolf administrations, along with labor and business interests. But it has aroused opposition from adjacent landowners and environmental groups.

The project’s first phase, using an existing underground pipeline repurposed to deliver up to 70,000 barrels of natural gas liquids a day, is already operating.

Sunoco wants to build one or two new adjacent pipelines as part of the Mariner East II project. Altogether, the pipelines could carry up to 675,000 barrels a day.

The legal arguments about the Mariner East project revolve around whether it is an interstate pipeline, governed by federal regulations, or an intrastate pipeline, regulated by the PUC. The Commonwealth Court ruled that it is both, and that it falls under PUC’s jurisdiction.

Three Cumberland County landowners had argued that the Mariner East pipeline was an interstate project, and that Sunoco lacked certification from the Federal Energy Regulatory Commission.

The pipeline was initially framed as an interstate project primarily to carry natural gas liquids to the Marcus Hook terminal for export on ships to Europe. But in 2014, Sunoco added terminals in Pennsylvania to deliver propane to local markets.

The landowners argued that Sunoco contrived to convert the project into an intrastate pipeline only after a York County judge had agreed with landowners who said it needed a federal certificate.

In a separate dissents, Judge P. Kevin Brobson and Judge Patricia A. McCullough questioned whether Sunoco’s “true purpose” in taking property was to provide public utility service to Pennsylvanians.

“Private ownership of property is a fundamental right under the U.S. Constitution, and as noted by my colleague, Judge Brobson, in his dissent, a right that is zealously protected under the Pennsylvania Constitution as well,” McCullough wrote. “The majority’s decision, I fear, will gravely undermine that right.”

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