The Department of State is proposing a smaller increase to the biennial lobbying registration fee, backing off of the higher $700 fee proposed last summer after non-profits, advocacy groups and small businesses had concerns about the increase.
The department wants to increase its once per legislative session registration fee to $400 per individual lobbyist and principal to, as the Corbett administration has said, end the “taxpayer subsidy” of maintaining the state’s Lobbyist Disclosure Database.
An analysis of the final rule making says the department determined a $400 fee, or 100-percent increase, would be “more manageable for small businesses” than the $700 fee.
“Further, an increase to $400 accomplishes the department’s goal of the regulated community contributing more equally towards the costs associated with their regulation,” the analysis states.
The department estimates there will be about 1,796 principals, 143 lobbying firms and 1,482 lobbyists that will be impacted by the increased fee. To meet registration requirements, lobbyists must spend at least $2,500 in any quarter of a registration period.
The increase, if approved and applied to the 2015-16 registration period, would cover 72 percent of the department’s administrative expenses, with the remaining 28 percent supplemented by General Fund resources, according to the regulatory analysis.
For the 2013-14 registration period, the department is projected to spend approximately $1.7 million to administer the Lobbying Disclosure Act, while generating about $684,400 in revenue from the registration fees. The department is authorized to spend $800,000 from the Restricted Lobbying Disclosure Account, which will cover about 49 percent of the total costs of administration. The remaining 51 percent of the disclosure expenses will be funded by the General Fund, according to the analysis.
“While the costs of administering the act continue to increase, General Fund support remains flat, therefore, it is necessary to increase the registration fee. The increased biennial registration fee will allow the Department’s Lobbying Disclosure Division to maintain the same level of customer service and transparency currently offered by the Department,” the analysis says.
The increase shouldn’t pose much of a hardship to the corporate lobbyists working the state Capitol’s halls.
Twenty nine of the top 50 Fortune 500 companies, including Wal-Mart, Exxon Mobil, Apple and General Electric, as well as 13 of the 20 Commonwealth-based companies on the Fortune 500 list like Comcast, Rite Aid and PPG Industries, are currently registered principals.
“The proposed fee increase is unlikely to adversely impact the many large corporate principals or the lobbyists and/or lobbying firms whom they employ to the extent that the company pays the individuals’ registration fee,” the analysis says.
Barry Kauffman, a lobbyist and director of watchdog group Common Cause PA, which pushed for the Lobbyist Disclosure Act in 2006, says small firms will still feel the sting. He filed a letter with IRRC opposing the new increase last year, and again opposed the $400 per lobbyist and principal fee increase, calling it “excessive.”
“In reality that means a small organization still must raise at least $800 just to cover its lobby registration fees ($400 to register the organization, and $400 to register each lobbyist). For organizations with total annual budgets in the range of $100,000 per year, or less, $800 remains an extreme price for registering to lobby,” Kauffman wrote in a letter to IRRC last week.
The Lobbying Disclosure Act set the fee at $100. The fee was increased to $200 at the start of the 2011-12 registration period, and the state saw an increase in the number of total registrations. Specifically, the number of lobbying firms increased by 17, lobbyist registrations increased by 114, and principal registrations increased by 78, for a total increase of 209 registrations from the 2009-10 biennial period, according to the analysis.
The department says a decrease in the registration of lobbyists may occur when the fee increase becomes effective, but any decrease is anticipated to be negligible.
The Independent Regulatory Review Commission is scheduled to vote on the final rule making at its Sept. 18 meeting.
–Kevin Zwick, Capitolwire